Have @NZGreens accidentally published a chart showing substantial and pretty continuous real wages growth in recent decades?
12 Nov 2014 Leave a comment
in labour economics, politics - New Zealand, poverty and inequality, welfare reform Tags: poverty and inequality, The Great Enrichment
The UK’s welfare benefits cap of £26,000 per year – the income of the average working family
09 Nov 2014 Leave a comment
in welfare reform Tags: benefit caps, UK politics, welfare reform
Since the cap was introduced a year ago, more than 38,600 households have had the amount they are paid in benefits limited to £26,000 a year – the income of the average working family.
Despite predictions by critics that the new rule would cause misery, the poll – conducted by Ipsos Mori – found that 45 per cent of those affected say they have been spurred to return to work.
Benefits for couples and lone parents have been capped at £500 per week, or £350 for a single. childless person.
The £26,000-a-year cap is equivalent to an income of £34,000 before tax, which is similar to the salaries of many nurses and teachers.
Cheryl Prudham, her husband Robert and their nine children are going on a trip to Menorca, just weeks after the mum said she should be given a bigger house at the expense of the taxpayer.
HT: Daily Mail – their photos above are a little bit too focused on ethnic minorities. The Daily Mail’s audience is the working class Tory and the lower middle class.
James Tobin on limiting the domain of inequality
08 Nov 2014 Leave a comment
in applied welfare economics, income redistribution, Public Choice, welfare reform Tags: James Tobin, negative income tax, poverty and inequality, welfare reform
Fraudster Alan Knight jailed for £40,000 scam after pretending to be in a coma for two years | Daily Mail Online
08 Nov 2014 Leave a comment
in economics of crime, welfare reform Tags: crime and punishment
doctors spotted Knight – pictured with wife, Helen – eating, wiping his face and writing while he was in hospital for observations
The slums of Jebson Pl – down and out in New Zealand includes Sky TV
08 Nov 2014 Leave a comment
in poverty and inequality, welfare reform Tags: poverty and inequality, The Great Erichment, welfare reform
via Whale Oil Beef Hooked and waikato-times
Working for Families and work incentives
08 Nov 2014 Leave a comment
in labour economics, labour supply, politics - New Zealand, public economics, taxation, welfare reform Tags: effective marginal tax rates, tax – welfare system interactions
There are 3.38 million individual taxpayers. Of these, about 120,000 (3.4 percent) face EMTRs over 60%, 120,000 (3.4 percent) face EMTRs between 50% and 60%, and 160,000 (4.5 percent) face EMTRs between 40% and 50%. Slightly more than 88 percent of taxpayers face EMTRs below 40%.
HT: New-Zealand-tax-system-and-how-it-compares-internationally
Occupy Wall Street protesters didn’t like what they found when they actually met the bottom 1%
06 Nov 2014 Leave a comment
in labour economics, poverty and inequality, welfare reform Tags: bottom 1%, economics of personality traits, Occupy Wall Street, poverty and inequality, top 1%
The Occupy Wall Street protesters had free food provided by kitchens staffed by volunteers.
These self appointed representatives of the bottom 99% didn’t appreciate brushing shoulders with the bottom 1 percent of the social stratum:
The Occupy Wall Street volunteer kitchen staff launched a “counter” revolution yesterday — because they’re angry about working 18-hour days to provide food for “professional homeless” people and ex-cons masquerading as protesters.
For three days beginning tomorrow, the cooks will serve only brown rice and other spartan grub instead of the usual menu of organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad.
They will also provide directions to local soup kitchens for the vagrants, criminals and other freeloaders who have been descending on Zuccotti Park in increasing numbers every day.
To show they mean business, the kitchen staff refused to serve any food for two hours yesterday in order to meet with organizers to air their grievances, sources said…
Overall security at the park had deteriorated to the point where many frightened female protesters had abandoned the increasingly out-of-control occupation, security- team members said.
Bryan Caplan on the pathologies of poverty
05 Nov 2014 Leave a comment
in labour economics, poverty and inequality, welfare reform Tags: Bryan Caplan, do gooders, Occupy Wall Street, poverty and inequality, top 1%
Bryan Caplan drew up a nice list of factors that contribute to poverty
- alcoholism: Alcohol costs money, interferes with your ability to work, and leads to expensive reckless behaviour.
- drug addiction: Like alcohol, but more expensive, and likely to eventually lead to legal troubles you’re too poor to buy your way out of.
- single parenthood: Raising a child takes a lot of effort and a lot of money. One poor person rarely has enough resources to comfortably provide this combination of effort and money.
- unprotected sex: Unprotected sex quickly leads to single parenthood. See above.
- dropping out of high school: High school drop-outs earn much lower wages than graduates. Kids from rich families may be able to afford this sacrifice, but kids from poor families can’t.
- being single: Getting married lets couples avoid a lot of wasteful duplication of household expenses. These savings may not mean much to the rich, but they make a huge difference for the poor.
- non-remunerative crime: Drunk driving and bar fights don’t pay. In fact, they have high expected medical and legal expenses. The rich might be able to afford these costs. The poor can’t.
Caplan argues that there is an undeserving poor if they fail to follow the following reasonable steps to avoid poverty and hardship:
- Work full-time, even if the best job you can get isn’t fun.
- Spend your money on food and shelter before getting cigarettes and cable t.v.
- Use contraception if you can’t afford a child
The Feed the Kids Bill still leaves their parents to go hungry!
05 Nov 2014 Leave a comment
in applied price theory, economics of education, politics - New Zealand, poverty and inequality, welfare reform Tags: Heartless Left, Leftover Left, school breakfast programmes
The Feed the Kids Bill that has been reintroduced into the new New Zealand Parliament still contains no provision to feed the parents who are too poor to make their children breakfast.
Why are these hungry parents not invited for breakfast as well? No parent would have breakfast if their children was to go hungry. Both the parent and child must have gone hungry that morning, perhaps morning after morning. There is no other charitable explanation.
The Bill aims to set up government funded breakfast and lunch programmes in all decile 1-2 schools. The cost is $100 million a year – including food, staffing, administration, monitoring and evaluation.
Lindsay Mitchell was on the money when she wrote:
Even parents reliant on a benefit are paid enough to provide some fruit and modest sandwiches daily.
An inability to do so is a symptom of a greater problem requiring scrutiny – for the sake of their child.
“The ‘income management’ regime provides a response to genuinely hungry children.
It may interest you that even Labour advocated for extended income management in its election manifesto.
Their 2014 ‘Social Development’ policy paper proposed, “…allow[ing] income management to be used as a tool by social agencies where there are known child protection issues and it is considered in the best interests of the child, especially where there are gambling, drug and alcohol issues involved.”
Hungry children is a child protection issue. Parents who fail to feed their children should come to the attention of the child protection authorities. Those on the benefit should be subject to income management because they clearly are spending their money elsewhere.
On the Left, there is a refusal to discuss the role of addiction and incompetent parenting in child poverty. The 2014 election manifesto of the Labour Party is a welcome departure from that tradition of denial.
Solutions should reflect the problem definition and analysis: Duncan Garner on child poverty
02 Nov 2014 Leave a comment
in economics of religion, labour economics, politics - New Zealand, urban economics, welfare reform Tags: child poverty, Duncan Garner, expressive voting, green rent seeking, land use zoning, regulation of land supply, Resource Management Act
Duncan Garner wrote a passionate column yesterday in the local paper calling for gutsy action on child poverty.
His analysis of the causes of child poverty in New Zealand was good. Garner’s solutions had nothing to do with what he had identified as the causes of child poverty. As Garner himself wrote:
… in order to tackle poverty it’s important to attempt to define what it means today.
Poverty is children living in crowded, damp homes who don’t get three square meals a day.
They may not have their own bed, they won’t see a doctor when they’re sick and many of them will be admitted to hospital with serious poverty-related illnesses such as respiratory problems and skin infections.
They may live in households where paying the rent accounts for 60 per cent of the family’s income every week.
Garner then discussed the plight of one particular family in Auckland:
The parents are nice people, with seven children.
They shared a tiny home with three other adults and another child.
Dad works full-time at a meat factory and they had been waiting 10 months for a state house. They had beds in the dining room and lounge.
They couldn’t afford the cost of a private rental home. One son, aged 11, had a serious lung problem. I saw poverty in action that day and it was deeply disturbing. I highlighted their plight on my radio show and within weeks a shamed Housing NZ had found them a home.
The family Garner discussed is in a tiny house because they lacked the income to rent a better one. They must rely on social housing provided by government with income related rents.
Recurring through his problem definition is the impact that rising housing costs is having on the poor.
Nonetheless, Garner then advocates cash payments to low income families, a tax credit system seen as more generous and inclusive, and a back to school bonus without addressing the supply of housing.
The evidence is overwhelming in New Zealand that the main driver of the increases in the child poverty since the 1980s is rising housing costs.
In the longer run after housing costs child poverty rates in 2013 were close to double what they were in the late 1980s mainly because housing costs in 2013 were much higher relative to income than they were in the late 1980s.
– Bryan Perry, 2014 Household Incomes Report – Key Findings. Ministry of Social Development (July 2014).
Any policy to reduce child poverty must increase the supply of houses by reducing regulatory restrictions on the supply of land.
The Metropolitan Limit confines the expansion of Auckland beyond the existing built-up area. This regulatory constraint explains the exceptionally high housing price-income ratio of Auckland.
The limit imposed on the horizontal expansion of the city in green fields encourages increases in residential prices. As demand for new housing increases, no new land supply can enter the market and stem price rises in response to this increased demand.
If you serious about child poverty, you have to criticise government regulation: the dead hand of the Resource Management Act (RMA) on the poor and the vulnerable.
The New Zealand social welfare system is the second most targeted towards the poor in the OECD
11 Oct 2014 Leave a comment
in applied welfare economics, labour economics, politics - New Zealand, welfare reform Tags: welfare reform
Managerial Econ: Why are wages decreasing and employment increasing in Great Britain?
19 Sep 2014 1 Comment
in applied price theory, labour economics, labour supply, welfare reform Tags: British economy, wage flexibility, welfare reform
The simplest explanation is that supply is increasing: as supply increases output increases real prices fall and output increases.
The Financial Times shows the data and puts forward several explanations:
(1) welfare reforms are pushing people off the dole and into the labor force;
(2) older workers are choosing to retire at a later age.
Both explanations would imply an increase in supply.
via Managerial Econ: Why are wages decreasing and employment increasing in Great Britain?.
Utopia, you are standing in it! 
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