The Dim-Post

January 7, 2016

The flaw in Jamie Whyte’s logic

Filed under: Uncategorized — danylmc @ 6:22 pm

The former ACT leader writes:

There is no poverty in New Zealand. Misery, depravity, hopelessness, yes; but no poverty.

The poorest in New Zealand are the unemployed. They receive free medical care, free education for their children and enough cash to pay for basic food, clothing and (subsidised) housing. Most have televisions, refrigerators and ovens. Many even own cars. That isn’t poverty.

Why then do we keep hearing that more than 20 per cent of New Zealand children live in poverty? Those who tell us this do not mean by “poverty” what most people do. They have a statistical definition: you live in poverty if your household’s income is less than 50 per cent of the national median (after tax and housing costs, and adjusted for the number of adults and children in the household).

It is a relative rather than absolute measure of poverty. Being an American pauper means having half the income of the average American. Being an Indonesian pauper means having half the income of the average Indonesian. Never mind that an American “pauper” may be richer than the average Indonesian.

David Farrar also talks about this all the time. ‘Why is poverty relative? Why not have an absolute measure of poverty?’ Well, the reason is that poverty is an intrinsically relative measure. It’s like ‘warmth’ or ‘tallness’. Yeah, you can say that if you compare New Zealand poverty to Indonesian poverty, say, then there is no poverty in New Zealand. But you could also just as validly compare us to the residents of Mayfair or the Île Saint-Louis or East Hampton, compared to whom pretty much all of us live in abject poverty. Because those are both stupid things to do we don’t actually do that and there’s an official measure of poverty which has broad political consensus.

If these guys can get that consensus changed so that only people whose living standards are comparable with homeless people living in the slums of Jakarta then yeah, great, there will be no ‘poverty’ in New Zealand any more. But there will be a big group of people who used to be classified as living in poverty, who have poor health and poor educational outcomes and higher rates of crime and unemployment and plenty of other metrics that strongly correlate with our current definition of poverty.

90 Comments »

  1. To be fair he does actually say that poverty is relative, but questions why it’s set at 50% rather than 40% or 20%. Presumably though that’s a question that has an answer along the lines of “there is lots of research that supports setting it at this level hence the international consensus” but he couldn’t be bothered finding out because he’s not arguing in good faith.

    Comment by Jake — January 7, 2016 @ 6:29 pm

  2. The real problem with adolescent ideological rubbish like Whyte’s being *published* is that it legitimises selfishness and reduces the social empathy that we need to help reduce the chroinic hardship and poverty of our fellow citizens. It is harmful duncery, rather than benign. The guy has to be one of the most consistently stupid people I have ever seen given time on tv, but also one of the most corrosive.

    Comment by Sacha — January 7, 2016 @ 6:39 pm

  3. Apparently Jamie White also recycled his article from something he wrote in The Times back in 2005: https://twitter.com/LI_politico/status/684955823286554625

    And the song remains the same …

    Comment by Andrew Geddis — January 7, 2016 @ 7:17 pm

  4. The question I have here is, to what degree is he actually speaking the truth? Because if it is true that poverty is simply based on a 60% median income rate, then he’s right; it’s a poor measure – surely he’s correct; a raise in the median wage actually hurts poverty. And it’s so hard to know, because poverty is politicized on both sides. So is he right or not?

    Seriously, this is a real question from someone who would never vote act. I want to know the answer; a) is this how we measure poverty and b) if it is, why is this not a really stupid way to measure poverty?

    Comment by ntrancer — January 7, 2016 @ 7:28 pm

  5. ntrancer – it’s the most commonly used proxy (because it’s easy – income stats are widely available and fairly robust), but it is a pretty poor one. The problem is coming up with a better one that’s still practical. Material hardship would be more accurate, but that’s much, much more difficult to measure (starting with how do you even define material hardship? Settling on a definition would be controversial enough). Even income levels don’t necessarily tell the story on the ground. For example, a family on a median household income with no debt and reasonable expenses might be fine, but another family on the same income, but with high-interest debt taking up a big portion of it, might not be able to afford some of the basics for their kids.

    I don’t agree with Jamie Whyte on much – and I definitely don’t agree that there’s no poverty in New Zealand – but he’s right that inequality is not the same thing as poverty. Some people would argue that inequality is a bad thing in and of itself, but that’s a slightly different issue. It’s a shame we don’t have a better metric for poverty.

    Comment by fivehoursnorth — January 7, 2016 @ 7:48 pm

  6. I think Poverty is being used as a proxy for Disadvantage. It might be more useful to have a better measure of disadvantage but it would be more complex to do.

    Relative income differences can lead to relative disadvantage but so can many other factors. And it’s the relative disadvantage as a consequence which is important.

    I think using the term Poverty – which has a quite specific set of connotations in everyday conversation – as a precise economic term isn’t helpful.

    Comment by NeilM — January 7, 2016 @ 8:05 pm

  7. “But there will be a big group of people who used to be classified as living in poverty, who have poor health and poor educational outcomes and higher rates of crime and unemployment and plenty of other metrics that strongly correlate with our current definition of poverty.”

    Yeah that’s the problem, we focus on this correlation, jump to causation without any logical basis and then advocate for policies that will target this poverty measure. Instead of, you know, looking for the real reason for these poor outcomes.

    Here is a study actually looking to see if there is a real link and, surprise surprise, there isn’t:

    http://www.stuff.co.nz/national/health/72900736/Education-not-poverty-behind-kids-obesity

    Comment by Matthew W — January 7, 2016 @ 8:21 pm

  8. Everything you ever wanted to know about low income/poverty/material wellbeing/hardship/deprivation in New Zealand and how it has changed since the early 1980s is available in this annual report by Bryan Perry, Ministry of Social Development:

    “Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014”

    https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/monitoring/household-incomes/

    Suggest you start with the Key Findings to get an idea of what it’s about.

    Comment by Kay — January 7, 2016 @ 8:28 pm

  9. I’m not sure there is a broad political consensus on the definition. The problem with a definition of poverty that includes people not in material hardship is that many people will not acknowledge that there is any dictionary definition poverty and others who’ll declere more money is the answer to issues where it won’t help.

    Comment by Richard — January 7, 2016 @ 9:19 pm

  10. > poverty is an intrinsically relative measure. It’s like ‘warmth’ or ‘tallness’

    Those seem to be terrible examples of intrinsically relative measures, as both can be measured in absolute terms (degrees and centimeters respectively).

    A.

    Comment by Antoine — January 7, 2016 @ 9:54 pm

  11. @Antoine Height and temperature are absolute, but tallness and warmth are relative.

    Comment by Jake — January 7, 2016 @ 10:10 pm

  12. From the Herald:

    “Dr Whyte voluntarily submitted the article to the Herald, and was not paid to do so. Dr Whyte did not inform the Herald the article had been previously published.
    The Herald accepted the article in good faith. It would not have appeared had the newspaper known the background.”

    Since the Herald is (was) the only remaining place that Whyte is taken at all seriously, he should really be more careful.

    Comment by sammy 3.0 — January 7, 2016 @ 10:15 pm

  13. I sometimes wonder if poverty/inequality denial will only be dealt to by a colossal act of Murphy’s Law that throws NZ full-on into the Great Recession club, most likely a very loud popping of the housing bubble or China sneezing hard. Even then, there’ll always be those who’ll sink further into denial, go a bit Trump-oid and “make NZ great again” at any cost.

    Comment by Kumara Republic — January 7, 2016 @ 10:21 pm

  14. Since the Herald is (was) the only remaining place that Whyte is taken at all seriously, he should really be more careful.

    Silly him. Allegations of plagiarism seem a bit excessive though. He doesn’t seem to have wanted to gain by deception.

    I think he has a point, and I have an fairly major allergy to things libertarian. I’m not sure why people pay Grennwald any attention

    I’m not going to go into details but a situation springs to mind of disadvantage from geographic location that doesn’t fit into the definition of poverty being debated.

    Comment by NeilM — January 7, 2016 @ 10:41 pm

  15. Under the current definition of poverty (those under 50% of median income) it is impossible to effectively reduce poverty without massive redistribution of income. Anyone with any ability in mathematics can figure this out if they try to determine what changes are needed to alter the distribution of income in any significant way. The definition is therefore meaningless in most western democracies.

    Comment by Noel Gilhunt — January 8, 2016 @ 12:07 am

  16. Whyte’s argument, so far as I can tell, amounts to semantic head (or arse) scratching; competing definitions of poverty will always be a ripe topic of conversation, especially among those who want to explain it away. And indeed, one man’s poverty may well be a Jakartan slum while another’s is a family that can not get ahead. But quibbling aside, any form of inequality is disturbing and sometimes dangerous.

    Whyte – as with his spectacularly stupid misundestanding of climate change – needs to leave his philosophical armchair and face inequality head-on.

    Comment by Alex — January 8, 2016 @ 1:13 am

  17. Whyte will be happy to recycle this argument because it goes down well. Most people see ‘relative poverty’ as a fact of life rather than as a problem to be solved. It is absolute poverty – material deprivation – that really concerns the majority.

    A.

    Comment by Antoine — January 8, 2016 @ 7:57 am

  18. @15

    > any form of inequality is disturbing and sometimes dangerous.

    Are you for real? This seems like a ‘right-winger”s caricature of what a ‘left-winger’ would think.

    A.

    Comment by Antoine — January 8, 2016 @ 7:58 am

  19. Well I had a colleague who was a sociology lecturer in a polytechnic in Auckland. She told me I couldn’t begin to know what poverty is, ‘because you’re white.’

    Comment by leeharmanclark — January 8, 2016 @ 8:07 am

  20. @Antoine,

    Those [“warmth” and “tallness] seem to be terrible examples of intrinsically relative measures, as both can be measured in absolute terms (degrees and centimeters respectively).

    You’re conflating “warmth” with “temperature” and “tallness” with “height”. For example, we definitively can say a liquid is at 35 degrees centigrade. But whether we would call that liquid “warm” or not depends on whether it is in a bath or a coffee mug.

    Comment by Andrew Geddis — January 8, 2016 @ 8:56 am

  21. @danyl: I think you’re misrepresenting Farrar’s position a bit. He doesn’t say we should measure against people living in the slums in Jakarta. He says we should have some sort of measure of a standard of living we think is a reasonable minimum for everyone in NZ (in particular those with children) and we should measure poverty against whether or not people have capacity to reach that level. (Note that I say capacity – we might say that it’s reasonable that every household have a TV, but if some parents decide that they don’t want their kids watching TV that doesn’t mean they’re in material poverty if they could have bought a TV but chose not to).

    I think that’s a pretty sound argument. I get that it’s perhaps hard, but the whole living wage campaign showed that people can calculate these things if they want to, and that the measure gets much more clearly into a discussion about what people do and don’t actually have access to – it makes discussions of poverty much more fact based.

    Comment by PaulL — January 8, 2016 @ 8:56 am

  22. @AG

    I see your point but I think there are better examples out there, that do not readily lend themselves to such conflation.

    A.

    Comment by Antoine — January 8, 2016 @ 9:01 am

  23. Allegations of plagiarism seem a bit excessive though. He doesn’t seem to have wanted to gain by deception.

    He wanted to “gain” the publication of his views in the most read newspaper in New Zealand, with the intellectual and reputational kudos that attaches to such publication. And as the Herald says today,

    Dr Whyte did not inform the Herald the article had been previously published.

    The Herald accepted the article in good faith. It would not have appeared had the newspaper known the background.

    Comment by Flashing Light — January 8, 2016 @ 9:07 am

  24. @Antoine,

    Sure, there’s a better example of the relative nature of a concept out there. Poverty.

    Comment by Andrew Geddis — January 8, 2016 @ 9:14 am

  25. Brian Easton has written a lot about poverty. Whyte could have simply picked up the phone and chatted to him about the subject, or perused Easton’s website.

    Easton reminds us that the 1972 Royal Commission on Social Security said:

    “(e) The aims of the [social security] system [and income-maintenance policy] should be

    (i) First, to enable everyone to sustain life and health;

    (ii) Second, to ensure, within limitations which may be imposed by physical or other disabilities, that everyone is able to enjoy a standard of living much like that of the rest of the community, and thus is able to feel a sense of participation in and belonging to the community;

    (iii) Third, where income maintenance alone is insufficient (for example, for a physically disabled person), to improve by other means, and as far as possible, the quality of life available. (Para 3/42 – original’s italics)”

    In the article below, Easton actually discusses a particular individual and explains why her standard of living isn’t good and what ought to be done about it. I imagine Whyte didn’t bother to read it.

    http://www.eastonbh.ac.nz/2012/08/4660/

    Comment by Ross — January 8, 2016 @ 9:24 am

  26. There are two clearly competing views of poverty. Material poverty focuses on the goods and services that a family can access and whether they meet a reasonable minimum standard of living. Relative poverty is more a discussion about inequality – it’s about whether you have as many goods and services as your neighbours or others in the country.

    The first is generally accepted by both sides of politics as a valid discussion – if people don’t have enough to live on it’s a problem. But of course the benefit system plus targeted transfer payments in NZ means that most people aren’t in material poverty, unless they have some sort of special need, mental health issues that mean they’re failing to access benefits, or substance abuse problems that mean they’re failing to spend the funds on food/material things.

    The second tends to be viewed by the left as being important, and those on the right much less so. And that’s the crux of this discussion – the right are saying “the taxpayers of NZ are prepared to fund people so they can feed, clothe, house and educate their children and themselves, but if you want more than that you need to get a job and pay for it yourselves”. The left are saying that they think our standard of citizenship should be that those without a job can still aspire to having a similar standard of living as those with jobs.

    This is a substantial ideological point, and legitimately a difference of political opinion. What I think Farrar is objecting to (and what I object to) is pretending that the second is the first – describing someone who isn’t as well off as their neighbours as being in “poverty”, which conveys images of having material needs that are unmet. If the political argument is that people should have similar relative standards of living, then make that argument directly. I suspect there are few votes in it, hence the desire to pretend that it’s poverty when it’s not – it’s easier to get votes when you paint NZ as a country where many people cannot afford to feed their children.

    Comment by PaulL — January 8, 2016 @ 9:24 am

  27. From the link at 24:

    “The Royal Commission defined belonging and participation as:

    no-one is … so poor that they cannot eat the sort of food that New Zealanders usually eat, wear the same sort of clothes, [and] take a moderate part in those activities which the ordinary New Zealander takes part in as a matter of course. The goal is to enable any citizen to meet and mix with other New Zealanders as one of them, as a full member of society – in brief, to belong. (Para 3/32 – original’s italics)

    In the poverty literature this is frequently interpreted as meaning that a society is not concerned merely with an absolute level of income (i.e. enough to ‘maintain life and health’) but a relative level enabling one to exist in a community whose average standard of living is somewhat above this absolute minimum (although of course there are societies whose average is close to the minimum). The UN conventions imply this relative notion when they state that appropriate measures are ‘in accordance with national conditions’”.

    Comment by Ross — January 8, 2016 @ 9:32 am

  28. Academics self-plagarise constantly – posters into papers into chapters, grant applications into millions of other grant applications – so maybe he thought it was okay.

    Comment by danylmc — January 8, 2016 @ 9:57 am

  29. “the benefit system plus targeted transfer payments in NZ means that most people aren’t in material poverty”

    That is simply not what the agencies at the coalface like foodbanks, budgeting agencies and city missions are telling us. Even the government admits that official hardship measures show a substantial number of New Zealanders still missing some of the basics. Increasing core benefits in a small way is also an admission of unmet need.

    Poverty hurts all of us. Today’s malnourished child is tomorrow’s taxpayer, innovator, employer, exporter – and care worker for retired boomers. Or they aren’t.

    Comment by Sacha — January 8, 2016 @ 9:58 am

  30. “if you want more than that you need to get a job and pay for it yourselves” – fair enough, so long as we do not have economic settings designed to produce a constant pool of unemployment, and barriers to education and training.

    Comment by Sacha — January 8, 2016 @ 10:02 am

  31. @Sacha

    Now that is a persuasive argument, because it focuses on real deprivation rather than inequality.

    In fact it spurred me to go online and donate at the city mission. Helping is better than arguing🙂

    A.

    Comment by Antoine — January 8, 2016 @ 10:08 am

  32. @Ross: implicit in the definition of material poverty is an element of relativity, I don’t think anyone in NZ thinks that we’d draw the line for material poverty at the line of the poor in Jakarta. I made that point in my earlier comment where I suggested that we in NZ might, for example, think that basic material needs included a TV, which clearly isn’t a basic material need in Jakarta. I’d perhaps also see some sort of access to the internet as a basic need in NZ. And again, these are legitimate points for discussion, but I’d prefer to discuss them in terms of need rather than in terms of percentage of median income.

    @sacha: it is definitely true that there are people in NZ in material need. And there are probably a substantial number of them – many thousands. But not 20% of the population. So again, we need to be careful what we’re conflating. I think that, for most people and most families, the benefit and transfer system we have is sufficient to meet what I consider to be basic material needs. There are a number of people who fail to have their material needs met, but my opinion is that, for most of those people, the problem isn’t a lack of money or that benefits need to be increased – rather that those people have some other underlying problem that we should be addressing through targeted assistance. Likely some combination of:
    – special needs (maybe a disability that increases the cost of that person’s material needs)
    – mental health issues
    – substance abuse issues
    – poor budgeting and planning
    Some of these things our current system is actually pretty good at dealing with. Others, such as mental health and substance abuse, it’s much worse.

    I’m very open to a discussion about how our current system fails the mentally unwell or addicted, and how treating these people would greatly improve their life outcomes and their ability to contribute to society. I’m much less open to a discussion about how the existence of those people indicates that our benefit and transfer system is insufficiently generous – the one does not imply the other.

    Comment by PaulL — January 8, 2016 @ 10:23 am

  33. I think PaulL pretty much nails it. I would only add that the public proponents of most of the participatory views of poverty use the term to try and transfer the positive moral weight we almost universally apply to relieving material poverty to the various concepts of participatory poverty. That’s mostly why their views receive some pushback and, at he extreme, some ridicule. Funding participation or belonging is an entirely different matter to removing material poverty though the latter is also, as noted above, a concept that changes from society to society.

    Comment by Tinakori — January 8, 2016 @ 11:19 am

  34. danylmc said
    “Academics self-plagarise constantly – posters into papers into chapters, grant applications into millions of other grant applications – so maybe he thought it was okay.”

    In academic writing, you are allowed to repeat the same material but it must be written differently. Anything directly quoted is meant to be written to show it’s a direct quote from previous material. It would be pretty hard if an academic develops a grand theory of everything and then having written about it is never allowed to mention it again.

    Grant applications are different because they are not academic writing in the published sense. And because of the huge cost of putting them together and low rate of success it just makes sense in terms of efficiency to reuse as much as possible.

    Comment by mjpledger — January 8, 2016 @ 11:22 am

  35. @PaulL and Tinakori

    So what about this notion that relative inequality causes social problems? Spirit Level sort of stuff?

    A.

    Comment by Antoine — January 8, 2016 @ 11:24 am

  36. if the issue is oarticipation, the comparison across a nation seems particularky arbitrary as Jamie Whyte points out. An inequality measure at the community level (eg town or suburb) would be more appropriate.

    Comment by Matthew W — January 8, 2016 @ 11:39 am

  37. Sorry participation

    Comment by Matthew W — January 8, 2016 @ 11:40 am

  38. Here’s a question, how does one measure low ‘participation in society’? Lack of internet access, lack of access to community amenities like libraries and swimming pools, not voting in local or national elections, not taking part in sport, …?

    A.

    Comment by Antoine — January 8, 2016 @ 12:17 pm

  39. There is a time element to this – people can move in and out of poverty as they get hired and laid off – repeatedly the lower down the employment hierarchy a person is. They can buy the trappings* of a good life in the good times and then be strapped for income to pay for rent and food in the bad times. (*I sold a tv for $10 on trademe off a $1 reserve so some of these trappings aren’t that expensive.)

    And there is also the aging aspect – young people are typically low wealth and low income and they generally climb out of it as they acquire skills to move up the employment ladder. But it doesn’t take many knocks to slide them down or off the ladder – they leave a job because of a nasty boss who won’t give them a reference, an unexpected but wanted pregnancy, a lingering illness, caring for a parent/sibling/child, wearing a union t-shirt to work, a workplace injury etc.

    So out poverty looks different to Jakata where people are born and live their whole lives in poverty *but* that doesn’t mean that at any point in time there aren’t NZers just as hungry and just as much in need of medical care as those Indonesians living off the rubbish dump.

    Comment by mjpledger — January 8, 2016 @ 12:26 pm

  40. @A

    I know the English were doing stuff about what were the basic needs of a person in order to be able to function in civil society. They did it by asking people in the general population what those needs were. From this they created an index that was to be used to stand alongside the “50% of median income” figure. At the time it was considered quite novel work.

    I had a quick look on google but I couldn’t think of the right search terms in order to find it – you may have more inspiration.

    Comment by mjpledger — January 8, 2016 @ 12:39 pm

  41. @Antoine: I agree that the potential for social problems is a concern that some have. There is a set of research on it, and some find that there are problems, others that most relative comparisons are with others in your suburb – so whether Jay-Z has a private jet doesn’t register a lot, whether your neighbour has an XBox does.

    Irrespective of the legitimacy of that discussion, it is a different discussion than one of poverty, and particularly children growing up in poverty. The imagery and language around that overwhelmingly is one of children going to school hungry, or worse, too poor to go to school at all. There are not 20% of NZers in that situation, which our current measure of poverty would suggest.

    My argument is that it is somewhat dishonest to conflate these two things – if we’re talking about material poverty, and hungry children, then we should use statistics that relate to people in material poverty. If we’re talking about participation, then it’s legitimate to use the 20% statistic, but we should be clear we’re not talking about hungry children at that stage, we’re talking about children whom don’t have toys that are as flash as their friends at school (or, perhaps a more concerning example, children who can’t afford to go on the same field trips or play the same sports). It’s a legitimate concern, it’s just not the same concern.

    Comment by PaulL — January 8, 2016 @ 12:59 pm

  42. I’d be pleased if any socialist contributing to this discussion could point me to a socialist economy that isn’t underpinned by debt as a result of over-spending and excessive intrusion into the private sector by by govt.

    Then they can tell me how such policies make the poorer in our communities better off.

    Comment by Redbaiter — January 8, 2016 @ 12:59 pm

  43. “….wearing a union t-shirt to work…” I like how you just throw that in there as if it is the same as loosing a limb or getting multiple sclerosis , perhaps that’s why union membership is so low?

    Comment by Exclamation Mark — January 8, 2016 @ 1:00 pm

  44. Jamie justified his own point of view – there is no poverty in NZ – by attacking a commonly used poverty metric.

    Whether there is merit in his argument or not, and there may be, what I found most intertesting, was the lack of any suggested alternate poverty metrics which he may have found acceptable, or discussion of other commonly used poverty metrics.

    This cherry picking criticism suggests to me a lack of real willingness to engage in the topic, which I feel belies underlying ideology or beliefs, which remain comfortably untested and unconnected with what is really occuring in NZ.

    Comment by PQ — January 8, 2016 @ 1:01 pm

  45. “So what about this notion that relative inequality causes social problems? Spirit Level sort of stuff?”

    There’s a heap of stuff written about this and a good start is the link to the Bryan Perry material linked to above.

    I think the issue here is that there is no society wide consensus about what it is or what might be done about it. I also don’t agree with Danyl that there is a broad political consensus on this issue and how it can be measured.

    Comment by Tinakori — January 8, 2016 @ 1:03 pm

  46. NZ doesn’t have free education.

    The family must pay the “donation” for EACH child.
    The family must pay for school materials for EACH child.
    The family must pay for a uniform for EACH child ($800? – it’s a now a scam).
    The family must pay NCEA exam fees for EACH child….or they can’t get their results.

    That ends up being thousands of dollars for families with a few kids. I know of one solo Mum with 5 kids – partner took off – who would spend about 20% of her benefit on school costs alone….

    NZ definitely does not have free education.

    Comment by truthseekernz — January 8, 2016 @ 1:17 pm

  47. Truthseeker-

    Try rejecting socialist delusion.

    Education is not “free”, simply because nothing is ever free. If you’re not paying for it, someone else is. Its why Thatcher said “the trouble with socialism is that eventually you run out of other people’s money”. Yet socialists still persist in trying to make water flow uphill.

    “Free”, as used by socialist politicians of all hues in NZ, is a despicable cowardly deceit upon those not intelligent enough to know they’re being sold a gold brick by master con men.

    As for your solo mother with five kids and a missing husband, this is what happens to cultures decaying under the influence of progressive social ideas. For decades women have been brainwashed by the political class into believing marriage is worthless, that one can slip in and out of relationships at a whim, have kids when they feel like it, and that in the event of poverty and declining living standards for such individuals sucked into this mantra, the rest of society will fix it for them. Via big govt.

    Its a recipe destined to fail, and fail it will. There is no free lunch not ever.

    We are all responsible for our own damn fate and we need to be damn careful we do not fall in to the traps the progressives have set for us.

    Comment by Redbaiter — January 8, 2016 @ 1:40 pm

  48. PaulL nails it here:

    “What I think Farrar is objecting to (and what I object to) is pretending that the second is the first – describing someone who isn’t as well off as their neighbours as being in “poverty”, which conveys images of having material needs that are unmet. If the political argument is that people should have similar relative standards of living, then make that argument directly. I suspect there are few votes in it, hence the desire to pretend that it’s poverty when it’s not – it’s easier to get votes when you paint NZ as a country where many people cannot afford to feed their children.”

    I agree. It is patently ridiculous that there is an observed “increase in poverty” due to the median wage going up.

    “But you could also just as validly compare us to the residents of Mayfair or the Île Saint-Louis or East Hampton, compared to whom pretty much all of us live in abject poverty. Because those are both stupid things to do we don’t actually do that and there’s an official measure of poverty which has broad political consensus.” – Danyl

    Precisely, Danyl. And that ‘official measure’ makes the same mistake that your counterfactual scenario does, hence why it is also completely useless and, as you put it, a “stupid thing to do.”

    Comment by Bastiat — January 8, 2016 @ 1:41 pm

  49. Probably worth a reminder about how the government of which Whyte wanted to be a part has no interest in any alternative measure: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10827418

    Comment by Patrick — January 8, 2016 @ 1:43 pm

  50. Patrick, it sounds like they didn’t have any interest in a measure full stop, which calls into question Danyl’s assertion that this measure has broad political consensus.

    Comment by Matthew W — January 8, 2016 @ 2:09 pm

  51. Matthew

    I’m with you there. I’d quite like to hear Danyl’s reasons for his assertion.

    Comment by Bastiat — January 8, 2016 @ 2:40 pm

  52. Interesting that none of the critics of the current measure of poverty have come up with a better measure. The current measure is not 60% of the median income but 60% of the median income after housing costs.

    Comment by Ross — January 8, 2016 @ 2:47 pm

  53. @Ross

    There are various measures of material deprivation at Kay’s MSD link at @8 above.

    A.

    Comment by Antoine — January 8, 2016 @ 3:00 pm

  54. Funding participation or belonging is an entirely different matter to removing material poverty

    To quote from Brian Easton’s examination of the case of Ms ‘Smith’. “The Smith budget has zero provision for the following items:

    Life assurance
    Dental care
    Stationery/uniform
    Pet expenses
    Recreation
    Presents
    Haircuts/personal products
    Personal cash
    Children’s pocket money
    Children’s education (trips)
    Donations (church/charity/koha)
    Outlays on consumer durables.
    Furniture, furnishings and floor coverings
    Household textiles
    Household appliances
    Glassware, tableware and household utensils
    Tools and equipment for house and garden
    Other household supplies and services
    Recreation and culture
    Audio-visual and computing equipment
    Major recreational and cultural equipment
    Other recreational equipment and supplies
    Recreational and cultural services
    Newspapers, books and stationery
    Package holidays
    Miscellaneous domestic holiday costs
    Miscellaneous goods and service
    Personal care
    Personal effects nec (sic)
    Insurance
    Credit services
    Other miscellaneous services
    Alcoholic beverages, tobacco

    “One might conclude that the Smith budget, prepared by a reputable budget advisory service, meets (or almost meets) Royal Commission’s first aim of sufficient to sustain life and health. It certainly does not attain the Royal Commission’s second aim of being able to enjoy a standard of living much like that of the rest of the community, and thus able to feel a sense of participation in and belonging to the community.”

    Comment by Ross — January 8, 2016 @ 3:07 pm

  55. Does anyone in New Zealand actually work with genuinely relative poverty lines? These are lines where the absolute value changes year on year based on the median income (say, a line set at 50% of the median income in the year in question). From a very, very quick skim, the MSD report that Kay linked to above makes use of an anchored poverty line which appears to be a line that starts based on a relative value in one year (say 50% of the median income) and then which is only adjusted for inflation. That’s a big difference. Whereas under a relative poverty line, if a country becomes wealthier but the distribution of income stays the same, measured poverty won’t fall, with an anchored line, it will. I only skimmed the report so could be wrong; however, back in the days MSD used anchored lines for their low income lines, and I’m guessing they still do. In which case much of the ACT guy’s bluster is about nothing.

    FWIW genuinely relative poverty lines are useful because they measure how well a country is doing in making sure its available resources benefit its least well off. There is an absolute element to poverty though, so you wouldn’t want to use relative lines on their own. But it doesn’t seem like anyone (in MSD at least) is.

    Comment by terence — January 8, 2016 @ 3:28 pm

  56. Paula Bennett & Co had better hope that sweeping the issue under the carpet won’t lead to those on the wrong side of the tracks to join something like FARC or Daesh in a generation’s time.

    Comment by Kumara Republic — January 8, 2016 @ 5:02 pm

  57. AFFLUENZA – love it!!!!!!!!!!!!!!

    Comment by Carolyn Sutherland — January 8, 2016 @ 9:08 pm

  58. Interesting choice of illustration on the website showing a group of mainly obese people queuing for food parcels.

    Bryan Easton’s list is scary. I don’t agree all of them are ‘Necessary’ for a reasonable life and grants can be got for a number of others, it’s still there but for the grace…

    As for the NZ Herald getting sniffy about a contributor recycling content, it’s a bit rich after spending summer recycling content under title of ‘best of 2015’, not to mention all those other times they recycle the content from other media. No hypocrite like the media trying to ride a high horse

    PS is it actually possible to plagiarise your own work?

    Comment by insider — January 8, 2016 @ 9:10 pm

  59. I prefer to read, not comment, but some things really get my goat. Redbaiter’s post reads as if he thinks that decades of brainwashing and [DPB or similar] taxpayer subsidies have resulted in (only) women being trapped by progressives into thinking that the state will pay for child-rearing and so women have gleefully hopped onto the free ride. Not men? Men were immune from this?
    Jesus H. C. Go back to the fifties.

    Comment by Hkh75 — January 8, 2016 @ 9:11 pm

  60. Hkh75: what Redbaiter posts is no longer surprising. You’d be forgiven for thinking he’s a member of the John Birch Society – in his view even Ronnie Reagan and Maggie Thatcher are bleeding heart socialists.

    Comment by Kumara Republic — January 8, 2016 @ 9:17 pm

  61. Whilst I’m commenting. At the bottom end NZ also scores comparatively low on other indicators of poverty: infant mortality, communicable diseases, mobility, etc.

    Comment by Hkh75 — January 8, 2016 @ 9:50 pm

  62. Bryan Easton’s list is scary

    Yeah, the temerity of anyone wanting a hair cut or dental care.

    Comment by Ross — January 8, 2016 @ 9:59 pm

  63. is it actually possible to plagiarise your own work

    It is.

    http://www.du.ac.in/du/uploads/research/06122014ithenticate-selfplagiarism.pdf

    Comment by Ross — January 8, 2016 @ 10:06 pm

  64. hkh75- “Not men? Men were immune from this?”

    Of course not. Progressive men are as badly brainwashed as Progressive women. They are as equally apathetic of the damage casual relationships (producing children) wreak upon our social structures. And they are as equally ignorant in their expectation that there is an endless supply of money somewhere that will pay for it all.

    Happy now?

    It didn’t cross my mind make the point initially as I’m not that fixated on gender issues as some.

    Do you know its probably only about the top 20% of earners in NZ who are positive contributors to the tax system? And given that many of them are probably employed by govt, even that figure could be too generous.

    The whole setup is so obviously unsustainable to anyone who can do maths its ridiculous, and while all this foolishness is going on, NZ’s left wing chattering class is worried about the precise definition of poverty. And endlessly waffling over gender.

    Just unbelievable.

    It could only happen in a “Progressive” society.

    “Go back to the fifties.”

    Was the youth of the fifties as unbelievably stupid as the youth of today??

    Comment by Redbaiter — January 9, 2016 @ 2:08 am

  65. NZ’s left wing chattering class is worried about the precise definition of poverty.

    Hmmm I don’t think Jamie Whyte would describe himself as left wing.

    Comment by Ross — January 9, 2016 @ 8:38 am

  66. is it actually possible to plagiarise your own work

    It is.

    And if Whyte were to do that with published research, rather than an opinion piece, there’d be reason to question his ethics. As it stands, there’s reason to question only his opinions, which appear to consist of non-sequiturs.

    Comment by Psycho Milt — January 9, 2016 @ 9:17 am

  67. “Hmmm I don’t think Jamie Whyte would describe himself as left wing.”

    I admire Jamie Whyte for his courage in standing for and winning Epsom, but as far as combating the left goes, he’s pretty much clueless. As for being right or left wing, no self respected right winger would allow themselves to be controlled by a bunch of socialist progs like the National Party. Flag changer John Key is IMHO worse than Helen Clark, just kept the boiler of the old socialist train stoked with coal and trundling down the same old line. He’s got even less of a clue than Whyte. A Crosby Textor style surrender monkey who could have done so much but did SFA. Its why we’re still talking about poverty after more than 20 years of socialism.

    Comment by Redbaiter — January 9, 2016 @ 12:10 pm

  68. “I admire Jamie Whyte for his courage in standing for and winning Epsom”

    Is it possible the vast gulf between Redbaiter’s political weltenschauung and everyone else’s can be explained by the fact that his analysis rests on events that didn’t actually happen?

    Comment by Jake — January 9, 2016 @ 9:21 pm

  69. Jake- Sorry, you’re quite correct. Momentarily confused Whyte with Seymour. Thank you for drawing it to my attention.

    No matter. What I said still applies. ACT were the Association of Consumers & Taxpayers, and in that simple configuration were an effective political force. Once they started all this half baked “liberal” stuff they lost their way, and they’ll remain a small and ineffective force as long as they chase that confusing and ephemeral concept. With the electorate more dumbed down every year, its something they’re going to have increasing difficulty in selling.

    When a politician talking about making changes to welfare gets emails saying “don’t dare touch MY money bitch” you can see where the problem lies.

    Comment by Redbaiter — January 10, 2016 @ 1:20 am

  70. It is though only too easy to pick holes in these sorts of definitions.

    Any public institution in order to function has to draw lines through the mess of reality.

    I’m not sure how useful this definition is in practice for anyone.

    Comment by NeilM — January 11, 2016 @ 1:28 pm

  71. If Jamie Whyte worked in a factory for 40 hours a week at the minimum wage rate, and it took 35 hours worth of pay out of that 40 hours of work a week to pay for his rent, electricity, food, and petrol, I’m sure he would say that there is poverty in New Zealand.

    There are many working-poor in New Zealand and these people qualify for State education for their children and assistance from Inland Revenue and an Accommodation Supplement, but that’s about it. Work & Income won’t have anything to do with these people, not even for one-off food grants. Sometimes Government agencies will help; but not often, and these are people who are working for a living!

    Jamie Whyte and those like him will probably rubbish my ideas: of the introduction of a Mansion Tax on the purchase of luxury residential property above a thresh-hold of $1,500,000; of a Buy A Park scheme for Kiwi owners of small-to-medium sized companies to help councils pay back some of their debt obligations; for the introduction of a comprehensive Inheritance Tax which includes the family home (as long as the family home was not purchased for more than $1,500,000); and free dental initiatives for those on low incomes to replace fluoridated water. However, the statistics show that there is a need for these ideas in our society.

    If we have 20% of our children living in poverty relative to the median income, that is still a problem, and we need pieces of legislation to change it. A Mansion Tax. Comprehensive Inheritance Taxation. More State houses to be built. Less financial kickbacks for the rich and more financial incentives for the poor.

    And, do you know why people stay on a benefit for years? There aren’t the jobs for them to go to. There is no development in many of our regions. National attacks Labour every time they say that we need to create jobs in the regions, saying it will be a “white elephant”. People get a job for, say, two months, and it takes two weeks for the first pay to come through from that job, and in the meantime there is no bridging finance from Work & Income, only a $100 or $200 food grant to last for two weeks until you get paid. What about the rent? You won’t have any savings if you have been on a benefit, so it seems as though you are discouraged from working. Statistics have shown a marked decrease in the number of full-time permanent jobs and an increase in part-time, casual and seasonal jobs, so bridging finance at Work & Income needs to be adjusted to reflect this long-standing trend.

    Comment by Daniel Lang — January 11, 2016 @ 1:46 pm

  72. @NeilM

    > I’m not sure how useful this definition is in practice for anyone.

    It is useful for the opposition because it gives them a stick to beat the government with.

    It also helps them to frame the policy debate. If inequality is the problem, then logically redistribution must be the solution.

    @Daniel Lang

    > If Jamie Whyte worked in a factory for 40 hours a week at the minimum wage rate, and it took 35 hours worth of pay out of that 40 hours of work a week to pay for his rent, electricity, food, and petrol, I’m sure he would say that there is poverty in New Zealand.

    Are you starting from the assumption that Jamie is a normal and reasonable person??

    A.

    Comment by Antoine — January 11, 2016 @ 2:01 pm

  73. Deborah Hill-Cone (of all people) ponders whether Whyte’s real problem might be emotional poverty – http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11571800

    Comment by Sacha — January 11, 2016 @ 2:26 pm

  74. It is useful for the opposition because it gives them a stick to beat the government with.

    Except the Opposition (whoever that might be) didn’t create the definition, nor would it matter what definition was used because the current Government would simply ignore it. You’ve only got to look at its response to beneficiaries being short-paid for years to see how mean-spirited this Government is.

    http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11546801

    Comment by Ross — January 11, 2016 @ 2:31 pm

  75. >> It is useful for the opposition because it gives them a stick to beat the government with.

    > Except the Opposition (whoever that might be) didn’t create the definition

    I didn’t say they did.

    ,> nor would it matter what definition was used because the current Government would simply ignore it.

    No doubt. But the Opposition aren’t trying to change the National Government’s thinking, they’re trying to win votes.

    A.

    Comment by Antoine — January 11, 2016 @ 2:35 pm

  76. But there will be a big group of people who used to be classified as living in poverty, who have poor health and poor educational outcomes and higher rates of crime and unemployment and plenty of other metrics that strongly correlate with our current definition of poverty.

    We have decreasing crime rates and higher than previous labour force participation. Yet we have soaring “poverty”. There is no correlation.

    https://en.wikipedia.org/wiki/Crime_in_New_Zealand
    http://www.tradingeconomics.com/new-zealand/labor-force-participation-rate

    The current methodology of measuring poverty is a political creation to achieve political ends, because the easiest way to alleviate this sort of “poverty” is to subsidise the middle class. When the left wing middle class start screaming about rising “poverty”, they are actually saying “give us more money”.

    This “poverty” metric is the new normal, 3rd way, managerialist, stats driven Clintonian/Blairite politics typical of the modern left. Its aim is to be popular amongst the middle class and couldn’t be less interested in the poor if it tried.

    Comment by unaha-closp — January 12, 2016 @ 10:44 am

  77. I disagree with the comment above. Statistics have shown an increase in part time, seasonal and casual labour; and a decrease in full time permanent employment positions. Casual workers are not subsidised by the Government as much as they should be, so it is actually the working poor saying, “Give us more money.” It doesn’t have to be money for nothing. What about creating employment opportunities in the regions? The New Zealand Government used to employ thousands of forestry workers in the seventies and early eighties, but sold many forestry plantations, some under Muldoon, without any logical reason.

    Comment by Daniel Lang — January 12, 2016 @ 11:57 am

  78. But Daniel this would help poor people with low skills, it wouldn’t alleviate “poverty”. Under the sort of arrangements you propose the median wage might easily increase, which would increase “poverty”. What you are suggesting smacks of old style left wing politics, back when the left helped poor people.

    Now under Nu-Labour type politics the left knows that decrease poverty you need create lots of managerial service jobs suitable for the educated and accredited children of the middle class. These jobs will be okay paying at slightly less than the medium wage, but in jobs people want to do because they are “doing good for society”. The median wage falls and “poverty” decreases.

    Comment by unaha-closp — January 12, 2016 @ 1:07 pm

  79. @unaha-closp to carry on your line of argument, the majority of the $45k/year processing unit are created in Wellington and Auckland contributing to housing shortages, which does nothing for the regions.

    @Daniel how and why is owning large commercial forests the function of central Government?

    Comment by rsmsingers — January 12, 2016 @ 1:57 pm

  80. the median wage might easily increase, which would increase “poverty”.

    I’m not sure that’s necessarily true.

    Let’s say the median wage/income increases by 1% but wages/incomes below the median increase by 5%. Wouldn’t that mean that fewer people would likely be classified as being in poverty?

    Comment by Ross — January 12, 2016 @ 2:26 pm

  81. Ross, it is very risky. If we give lots of money to help poor people raising their incomes they’ll likely spend the money on consumer goods and feed the growth in the capitalist private sector driving up economic activity. At the same time people with high skill qualifications will start to demand higher wages in a booming consumer economy, whilst facing less competition as new entrants are diverted into the lower skilled jobs we are subsidising.

    Only if we give money to the middle classes and are we guaranteed to reduce “poverty”. A glut of managerial and service positions within the state sector at lower rates than the private sector will depress the medium wage. These new jobs are to be staffed by impressively credentialed young graduates, this growing pool of talent will put downward pressure on other highly skilled wages depressing high end wages even further. And the best bit about giving money to the middle classes, they’ll just buy houses – not even that inflationary.

    Comment by unaha-closp — January 12, 2016 @ 3:27 pm

  82. The only way to properly reduce poverty is to provide those who are living in poverty with employment. It doesn’t do anything for me if I am earning $20,000 per year and work really hard, if a lot of jobs are created for the offspring of the middle class in order to reduce the median wage. That doesn’t reduce my poverty or that of anyone else.

    @rsmsingers – It should be the function of central Government to own large commercial forests, as well as other ventures, to provide employment for those who would otherwise struggle to find permanent work. We saw the forestry sector be very successful under past Governments. Unemployment was not an issue. These days, unemployment is an issue, particularly, in the regions, so I would suggest that the Government looks into creating jobs in the forestry sector like they once did. What is the point of people getting assistance from the Government if the Government isn’t going to back them in a practical sense?

    Comment by Daniel Lang — January 15, 2016 @ 11:26 am

  83. The only way to properly reduce poverty is to provide those who are living in poverty with employment.

    You’re assuming that no one in employment experiences poverty. I can well imagine some workers – especially those paid below the minimum wage – living in poverty. But I agree that the Government ought to be focused on providing decent well paid jobs.

    Comment by Ross — January 15, 2016 @ 3:39 pm

  84. Ross: Such “decent well paid jobs” seem to be obtained through connections these days, instead of “honest hard work”. All the positivity porn we’ve been force-fed is attacking the symptom.

    As for the working poor, they’re fobbed off with things like, “be thankful you actually have a job in the first place.”

    Comment by Kumara Republic — January 15, 2016 @ 7:44 pm

  85. I should also add that a lot of what have traditionally been regarded as public goods, like housing, have basically been market-cornered by rentiers. And these rentiers are powerful enough to be an unelected upper house – only an act of Murphy’s Law like a bubble burst or the outbreak of war is guaranteed to kick the rentiers out of the housing market, because political leaders are either too cowardly or too closely tied to confront the issue.

    Comment by Kumara Republic — January 15, 2016 @ 7:54 pm

  86. Kumara,

    Well not in Auckland, we have made a social contract to prevent the construction of new houses. Its not market related, an Auckland house costs about $300,000 to build and $800,000 to buy. The market is giving us $500,000 if we build a house, a massive reward. The market wants more houses and more houses will mean lower rent.

    Rentiers are empowered by socialism, not the market. It is where people get together to act as a group for themselves, definitely socialist. This is what we get with a right-Labour mayor.

    Comment by Angus Robertson — January 18, 2016 @ 9:10 pm

  87. Angus: socialism, only in the sense of socialism for the hyper-class and what passes for a free market for the rest. When Right-wingers “get together to act as a group for themselves”, it’s sometimes known as an “old boys’ network”.

    Comment by Kumara Republic — January 18, 2016 @ 9:30 pm

  88. Its not market related, an Auckland house costs about $300,000 to build and $800,000 to buy.

    $300k will get you about 120sqm-150sqm for an average fitout for a detached property once you factor in all the costs.
    That’s not factoring the cost of land.

    To say it’s not market related is a bit silly, though I agree there are significant policy setting that encourage land banking / speculation which do massively distort the market.

    Comment by Gregor W — January 19, 2016 @ 11:29 am

  89. Kumara: when right wingers get together in the company of right wing politicians and it is called an “old boys’ network”. But when they do it in the company of Labour politician like Len Brown it is called something else.

    Comment by Angus Robertson — January 19, 2016 @ 12:41 pm

  90. yes the correct term is ‘a clusterf**k’, I believe.

    Comment by leeharmanclark — January 19, 2016 @ 5:01 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

Blog at WordPress.com.

%d bloggers like this: