Full-time work on the minimum wage is enough to keep a NZ family out of poverty!

An OECD chart that shows New Zealand parents only need to work a little over 40 hours a week on the minimum wage to lift a family out of poverty in New Zealand.

image

The figure above shows that a lone parent with two children needs to work about 25 hours a week stay out of poverty in 2013 in New Zealand Once taxes are taken into account as well as additional family benefits such as in-work tax credits. New Zealand is one of the easiest places in the world to get out of poverty by working part-time for a sole mother.

The figure above from the OECD shows that New Zealand couple with two children needs to work about 40 hours a week to stay out of poverty. Of course, what is poverty depends on the definition of the poverty line and in this case by the OECD, it is defined as 50% of the median wage after taxes and family benefits. Another common definition of poverty is earning less than 60% of the median wage

The minimum wage is $14.75 per hour in New Zealand while proposals for a living wage in New Zealand are now $19.25 an hour. The Labour Party wants to increase the minimum wage to $15 per hour.The Greens want to increase the minimum wage to the living wage.

Simon Chapple and Jonathan Boston pointed out in their excellent book last year on child poverty in New Zealand that full-time work by one parent and part-time work by the other in the same household is enough to lift families out of most  definitions of poverty:

Sustained full-time employment of sole parents and the fulltime and part-time employment of two parents, even at low wages, are sufficient to pull the majority of children above most poverty lines, given the various existing tax credits and family supports.

The best available analysis, the most credible analysis, the most independent analysis in New Zealand or anywhere else in the world that having a job and marrying the father of your child is the secret to the leaving poverty is recently by the Living Wage movement in New Zealand.

According to the calculations of the Living Wage movement, earning only $19.25 per hour with a second earner working only 20 hours affords their two children, including a teenager, Sky TV, pets, international travel, video games and 10 hours childcare. This analysis of the Living Wage movement shows that finishing school so your job pays something reasonable and marrying the father of your child affords a comfortable family life.

The OECD’s analysis also showed that incentives for New Zealanders to work more and earn more is better than in most countries in terms of what happens if they earn a wage increase.

image

In New Zealand, when there is a 5% minimum wage increase, four percentage points  of that wage increase actually stays in the hands of the worker.

In some countries such as Australia, the USA  and UK, 60 to 80%of the minimum wage increase is gobbled up in reductions in benefits and taxes. At the same time, the minimum wage increase makes it less profitable for your employer to retain you so your job is more at risk.

The only explanation I have for why the Labour Party, NZ Greens and the living wage movement don’t highlight the success of the existing minimum wage in reducing family poverty in New Zealand is mass kidnappings.

image

But for these abductions most fowl, I’m sure the Labour Party,  NZ  Greens and the living wage movement would be dancing in the street celebrating successes of capitalism and freedom in New Zealand in keeping families out of poverty through the minimum wage.

Income mobility in America

Down and out in NZ = social housing with fast broadband

The Dominion Post had a front page story yesterday about an 80-year-old pensioner required to pay for fast broadband in her new social housing. Her new apartment happens to be in my same suburb. I can see the new apartments from my window as I type.

She didn’t have much use for this fast broadband, which cost an extra $20 a month, because she is legally blind. She cannot have a landline-only option because of the way her apartment is wired and the way in which fast broadband works.

The 27 flats have been fitted with fibre-optic cabling, and residents, many of whom are pensioners or have disabilities, cannot opt for a landline-only service.

National building standards require new apartments to be wired with fast broadband. A classic example of the inability of central planning to deal with the diversity of preferences and incomes.

In this case, the victim of central planning it is an old age pensioners obviously in poor circumstances as well as legally blind who is out of pocket. She is one of a number of old age pensioners who are similarly out-of-pocket when they living on a strictly limited budget.

The mass kidnapping of Occupy activists has extended to New Zealand

Mass kidnappings is the only reason why the Occupy activists are not dancing seen in the streets to celebrate the steady fall of poverty in New Zealand over the last 20 years but for the hick-up of the GFC.

image

via Population with low incomes.

Would a living wage reduce poverty in America?

How to argue for welfare reform when sincerely arguing against the 1996 US Federal welfare reforms

The share of single mothers without a high school degree with earnings rose from 49 percent to 64 percent between 1995 and 2000 but has since fallen or remained constant almost every year since then. At 55 percent, it’s now just slightly above its level in 1997, the first full year of welfare reform (see first graph).

TANF now serves only 25 of every 100 families with children that live below the poverty line, down from AFDC’s 68 of every 100 such families before the welfare law

Over the last 18 years, the national TANF average monthly caseload has fallen by almost two-thirds — from 4.7 million families in 1996 to 1.7 million families in 2013 — even as poverty and deep poverty have worsened.

The number of families with children in poverty hit a low of 5.2 million in 2000, but has since increased to more than 7 million. Similarly, the number of families with children in deep poverty (with incomes below half of the poverty line) hit a low of about 2 million in 2000, but is now above 3 million.

The employment situation for never-married mothers with a high school or less education — the group of mothers most affected by welfare reform — has changed dramatically over the last several decades.

In the early 1990’s, when states first made major changes to their cash welfare programs, only about half of these mothers worked.

Importantly, there was a very large employment gap between the share of these never-married mothers and single women without children with similar levels of education, suggesting that there was substantial room for these never-married mothers to increase their participation in the labour force.

By 2000, the employment gap between these two groups of women closed, and it has remained so. But in the years since, the employment rate for both groups has fallen considerably.

The employment rate for never-married mothers is now about the same as when welfare reform was enacted 18 years ago. This suggests that the economy and low education levels are now the causes of limited employment among never-married mothers — not the availability of public benefits or anything particular to never-married mothers.

The Centre on Budget and Policy Priorities, who hail clearly from the Left of American politics, scrupulously documented the following:

  • Big gains in the employment of single mothers until a setback in the Great Recession but is still much better than in 1996;
  • Welfare dependency dropped by two thirds;
  • Despite this two third drop in welfare dependency, and earnest predictions of acute poverty and deprivation made in 1996, the number of families in deep poverty has not changed, and the number of families in poverty fell significantly and only rose again with the Great Recession; and
  • There was a dramatic increase in the percentage of never married mothers in employment, so much so that there is no difference in the employment rate of single women with no children and never married mothers!

Welfare dependency down by two thirds, employment of never married mothers up to levels no one thought possible, family poverty down, and economic independence is much more widespread and all because of the 1996 US Federal welfare reforms. That sounds like success to me – a great success.

via Chart Book: TANF at 18 | Center on Budget and Policy Priorities.

The changing American family

ednext_XV_2_mclanahan_fig01-small

ednext_XV_2_mclanahan_fig02-small

via Was Moynihan Right? What happens to the children of unmarried mothers : Education Next

The war on poverty at age 50: What US social programs worked and which failed? – Chris Blattman

Via The war on poverty at age 50: What US social programs worked and which failed? – Chris Blattman.

The economic and educational psychology case against making Te reo Māori compulsory in NZ schools

The Race Relations Commissioner Dame Susan Davoy has called for Te Reo Māori to be compulsory in New Zealand schools. She said being bi­lingual would be “a real added advantage” to young Kiwis and more people knowing Te reo Māori would help race relations.

Learning another language is not a priority for the Pākehā children or Māori mokupuna when you consider the poor literacy rates among Māori, Pasifika and Pākehā. The priority for children in an English speaking country is to master English. Too many children leave school with inadequate reading and writing skills.

Figure 1: Prose literacy by ethnicity, 2011

clip_image002

Source: Literacy skills of young adult New Zealanders | Education Counts.

Lower levels of literacy and numerously are much higher among Māori and Pasifika children. Pākehā consistently having a larger proportion in the higher levels  of prose literacy.

Figure 2: Prose literacy rates by ethnicity, 1996 and 2006

Source: Indicator 9: Literacy rates — Office of the Auditor-General New Zealand.

60%of Pākehā are above the minimum level of competence to meet the prose literacy requirements of a knowledge society. This contrasts with the majority of Māori and Pasifika who are below the minimum level of competence.

Furthermore, requiring children who do not have an aptitude for language or school in general to learn a language will reinforce in those who are not doing well that they are not very smart. This will give them more reasons to hate school and leave as soon as possible and never go back.

The key to helping children who do not have an aptitude to succeed greatly at school is to find the subjects where they do do well so they can get a good start to life. If students are not good at academic subjects, requiring them to do more academic studies such as study language is fool-hardy.

Taking resources, and more importantly, students learning time away from basic literacy skills will do little for a Māori economic development and race relations. This is because this taking resources and student learning time away from literacy and basic education will slow the closing of income gaps between Māori and others.

Language is a network good. It pays to join the largest network so you can communicate and do business with more people. The wage premium for immigrants learning English in English-speaking’s countries is about 15%.

Learning  Te reo Māori will not help children in their other subjects. The psychology of the transfer of learning was founded 100 years ago to explore the hypothesis that learning Latin gave the student muscle to learn other subjects, both other languages and generally learn faster.

Educational psychologists found that Latin does not help much in studying other languages and other subjects. No significant differences were found in deductive and inductive reasoning or text comprehension among students with 4 years of Latin, 2 years of Latin or no Latin at all.

Median income by race in America

IncomeAsian

via Saturday morning links – AEI | Carpe Diem Blog » AEIdeas.

How people with different incomes spend money

Down and out in Australia ain’t what it used to be

Stay-at-home moms are poorer, less educated than working moms

FT_14.04.07_Stay At Home Moms_sahmWorkingDiff640px (1)

stay at home moms in poverty percentage

via 7 key findings about stay-at-home moms | Pew Research Center.

Have real wages stagnated?

Will a living wage reduce child poverty in New Zealand?

Simon Chapple Jonathan Boston living wage child poverty

Image

Previous Older Entries Next Newer Entries

Bassett, Brash & Hide

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Truth on the Market

Scholarly commentary on law, economics, and more

The Undercover Historian

Beatrice Cherrier's blog

Matua Kahurangi

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Temple of Sociology

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Velvet Glove, Iron Fist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Why Evolution Is True

Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.

Down to Earth Kiwi

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

NoTricksZone

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Homepaddock

A rural perspective with a blue tint by Ele Ludemann

Kiwiblog

DPF's Kiwiblog - Fomenting Happy Mischief since 2003

The Dangerous Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Watts Up With That?

The world's most viewed site on global warming and climate change

The Logical Place

Tim Harding's writings on rationality, informal logic and skepticism

Doc's Books

A window into Doc Freiberger's library

The Risk-Monger

Let's examine hard decisions!

Uneasy Money

Commentary on monetary policy in the spirit of R. G. Hawtrey

Barrie Saunders

Thoughts on public policy and the media

Liberty Scott

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Point of Order

Politics and the economy

James Bowden's Blog

A blog (primarily) on Canadian and Commonwealth political history and institutions

Science Matters

Reading between the lines, and underneath the hype.

Peter Winsley

Economics, and such stuff as dreams are made on

A Venerable Puzzle

"The British constitution has always been puzzling, and always will be." --Queen Elizabeth II

The Antiplanner

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Bet On It

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

History of Sorts

WORLD WAR II, MUSIC, HISTORY, HOLOCAUST

Roger Pielke Jr.

Undisciplined scholar, recovering academic

Offsetting Behaviour

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Conversable Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The Victorian Commons

Researching the House of Commons, 1832-1868

The History of Parliament

Articles and research from the History of Parliament Trust

Books & Boots

Reflections on books and art

Legal History Miscellany

Posts on the History of Law, Crime, and Justice

Sex, Drugs and Economics

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

European Royal History

Exploring the Monarchs of Europe

Tallbloke's Talkshop

Cutting edge science you can dice with

Marginal REVOLUTION

Small Steps Toward A Much Better World

NOT A LOT OF PEOPLE KNOW THAT

“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.

STOP THESE THINGS

The truth about the great wind power fraud - we're not here to debate the wind industry, we're here to destroy it.

Lindsay Mitchell

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Alt-M

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

croaking cassandra

Economics, public policy, monetary policy, financial regulation, with a New Zealand perspective

The Grumpy Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

International Liberty

Restraining Government in America and Around the World