I think child poverty is the most crucial issue facing our country - I hope you saw the documentary shown on TV3 this week. This is my last post before the election tomorrow, so I've decided to pass on a short version of what the Child Poverty Action Group has to say about the idea that solving child poverty is sole parents' responsibility - all they have to do is get paid work. You can read the full statement on the CPAG website . If you missed the documentary, it's being replayed by TV3 on Sunday at 1 pm, or you can watch it here.
According to the 2010 General Social Survey, sole parents with children are the poorest family group in New Zealand. 70% have incomes of $30,000 or less – the highest percentage of any group – while only 4% have incomes over $70,000 (the lowest of any group). Well over a third, 38%, describe themselves as not having enough to get by, more than double the next highest group (17% of those ‘not in a family’). Almost half report living in a house or flat with ‘a major problem’ (like the mouldy houses in the TV programme), a much higher proportion than the general population (37%). Sole parents are more likely than any other group to feel ‘unsafe/very unsafe’ walking alone in their neighbourhoods at night. Not surprisingly, one in seven sole parents, a higher proportion than any other group, report their general health status as ‘poor/fair’.
So this economically depressed group, more likely to be suffering poor health than the rest of the population, with an even chance of living in shabby housing in a neighbourhood in which they will feel unsafe walking home from the night shift, will be required to find 15 hours per week of paid work when their eldest child turns 5. When the children are attending school, 15 hours work per week hardly sounds onerous, and many sole parents (usually those with good support networks) manage this. But imagine living in a suburb some distance from family, with poor public transport, few childcare facilities, and the nearest employment hub is only offering jobs for night shift workers. Does Work and Income cut a mother’s benefit for turning down that ‘suitable’ employment at the local massage parlour (and there is mounting anecdotal evidence that this is happening)? Suppose the 5 year-old gets sick and needs hospital care (as shown in the TV programme)? Suddenly that 15 hours is a lot of time and effort.
Sole parents whose youngest child is 14 will be expected to look for full-time paid work. In the language of the government, they will be ‘encouraged’ to do so by being put onto what will be called a Jobseeker Allowance, which will replace the unemployment benefit (UB) and sickness benefit. At present sole parents on either UB or SB are paid the same rate as sole parents on a Domestic Purposes Benefit (DPB). It is not clear at this stage if it is intended for these rates to remain in place, or if parents with children aged 14 and over will be moved onto the lower single person’s benefit rate. If so, this would equate to a benefit cut of over $80 per week.
Many sole parents with older children already work full time, but evidence suggests it can be difficult. There is often a small army of family and neighbours supporting the in-work project and it takes little to disrupt the smooth operation of the household. Radio New Zealand’s Mary Wilson suggested to the Minister of Social Development, Paula Bennett, that 14 year olds required even more supervision than younger children. The Minister replied that it was legal to leave 14 year olds home alone. Arguing that something is appropriate because it is legal shows a profound lack of ethics or understanding (or both) on the Minister’s part
There is nothing about the state of the labour market to suggest that changes to social assistance will improve the lives of those on a benefit, notwithstanding claims that work is the way out of poverty. Rather, although the government claimed its policies were aimed at closing New Zealand’s income gap with Australia (although that policy appeared to be formally abandoned in early 2011), the widening gap suggests that increasing the pool of cheap, desperate labour is in reality a strategy to reduce labour costs for employers. With a median hourly income for part-time female workers being just $16 per hour (bear in mind that the median means half earn less than this), a sole parent working 15 hours would receive just $135 of her gross wages of $240 after taxes and loss of benefit, hardly enough to cover transport and childcare costs.
For sickness beneficiaries, their returns from work are even less as they lose their benefit at a rate of 70c in the dollar from earned income over $80. Indeed, with little or no job creation occurring in the economy, and some beneficiaries facing effective marginal tax rates approaching 90 cents in the dollar, it is difficult to see what purpose the government has in mind for its welfare reforms to achieve, other than increasing the pool of low-skilled labour.
Job growth is sluggish, and well short of the 170,000 jobs the government claimed (in both the 2010 and 2011 budgets) would be created. Those jobs will be required just to absorb those currently unemployed, let alone a new cohort of harassed sole parents, as well as school leavers and university graduates. Work will not be the way out of poverty. Wages for unskilled occupations are low, and increase well below the rate of inflation...
National has been selling its economic plan as one that will produce a skilled, innovative economy. So far it looks more like one designed to produce an unskilled, low wage workforce, with the child poverty that inevitably seems to go with such backward policies.