@Maori_Party New Zealanders aged 25 to 34 with NCEA level 4 or above qualifications by ethnicity

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Source: OECD Economic Survey New Zealand 2015.

@jacindaardern wrong to say Australia is last place to follow in race relations

From 1965 onwards, 1/3rd of terrestrial Australia – 2.5 million sq kms of land – was returned to indigenous owners, with half of that since the Native Title decision in 1993. Tasmania pioneered aboriginal land rights with the Cape Barron Island Act 1912.

Source: Jon Altman, The political ecology and political economy of the Indigenous land titling ‘revolution’ in Australia, March 2014 Māori Law Review.

New Zealand extinguished native title twice in its history with the 2nd of these takings of Māori land by the last Labour government with the foreshore and seabed legislation. In her op-ed today, has Jacinda Ardern forgotten why the Māori party came into being?

Unlike New Zealand, Australia welcomed migrants from a wide range of ethnicities after the Second World War. It abolished the White Australia policy in the 1960s along with any discrimination in its Constitution against aboriginals.

Australia takes 8 times as many refugees as New Zealand on a per capita basis.

This redress of indigenous grievances was done out of the generosity of the Australian heart. Aboriginals are a tiny minority in Australia with little independent political pull.

Ethnicity of people receiving Sole Parent Support in NZ

NZ real household incomes up 55% since 1994 but no dancing in the street by the Leftover Left

Pakeha and Pasifika real household incomes increased by 55% since the low point of 1994. Maori household incomes increased by 65% since 1994.

image

Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), Table D.6.

@CloserTogether @FairnessNZ nail case for neoliberalism @chrishipkins @Maori_Party

The Council of Trade Unions and Closer Together Whakatata Mai charted similar statistics to show that everything has gone to hell in a hand basket since neoliberalism seized power in New Zealand in 1984 and in particular after the passing of the Employment Contracts Act in 1991.

image

Source: Income Gap | New Zealand Council of Trade Unions – Te Kauae Kaimahi.

The passage of the Employment Contracts Act greatly reduced union power and union membership and with it wages growth in New Zealand, according to what is left of the New Zealand union movement.

image

Source: Income Gap | New Zealand Council of Trade Unions – Te Kauae Kaimahi.

Unfortunately, both charts of the same statistics show the exact opposite to what was intended by The Council of Trade Unions and Closer Together Whakatata Mai.

Even the most casual inspection of the data charted above and reproduced below with some annotations shows that real wages growth returned to New Zealand in the early 1990s after 20 years of real wage stagnation.

image

Source: Income Gap | New Zealand Council of Trade Unions – Te Kauae Kaimahi.

The reforms of the 1980s stopped what was a long-term decline in average real wages. The reforms of the early 1990s including the passing of the Employment Contracts Act was followed by the resumption of sustained growth in average real wages with little interruption since.

Closer Together Whakatata Mai has even stumbled onto the great improvements in household incomes across all ethnicities since the early 1990s.

The increase in percentage terms of Maori and Pasifika real household income is much larger than for Pakeha. As Bryan Perry (2015, p. 67) explains when commenting on the very table D6 sourced by Closer Together Whakatata Mai:

From a longer-term perspective, all groups showed a strong rise from the low point in the mid 1990s through to 2010. In real terms, overall median household income rose 47% from 1994 to 2010: for Maori, the rise was even stronger at 68%, and for Pacific, 77%. These findings for longer- term trends are robust, even though some year on year changes may be less certain. For 2004 to 2010, the respective growth figures were 21%, 31% and 14%.

image

Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), Table D6.

As Closer Together Whakatata Mai  documented, incomes increased in real terms by 14% for the bottom and 19% for the middle.

Perry noted that in the lowest decile had too many implausible incomes including many on zero income so he was wary of relying on it. I have therefore charted the second, median and top decile before and after housing costs below. All three deciles charted showed substantial improvements  in incomes both before  and after housing costs.

image

Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015).

Naturally, measuring changes in living standards over long periods of time is fraught with under-estimation. There are new goods to be accounted for and product upgrades too.

Maori and Pasifika economic progress since 1988

From a longer-term perspective, all groups showed a strong rise from the low point in the mid 1990s through to 2010. In real terms, overall median household income rose 47% from 1994 to 2010: for Maori, the rise was even stronger at 68%, and for Pacific, 77%.

These findings for longer- term trends are robust, even though some year on year changes may be less certain. For 2004 to 2010, the respective growth figures were 21%, 31% and 14%.

Bryan Perry (2015, p. 67)

image

Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), Table D6.

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.

The politics of ethnicity-based research in New Zealand

When Simon Chapple in 2000 wrote “Māori Socio-Economic Disparity”, which showed that disadvantage in New Zealand is more closely tied to age, marital status, education, skills, and geographic location than it is to ethnicity, broadly conceived, such as Māori ethnicity:

  • He was summoned before the Māori Affairs Committee of parliament to defend his paper! His chief executive at the Ministry of Social policy went along with him to defend what he wrote while employed as a senior analyst at the Department of Labour.
  • The head of the Māori Affairs Ministry accused Simon of breaching the public services code of conduct.

Chapple also found that there are important differences in socio economic development by Māori self-identity. Those who identified only as Māori did worse than those that are identified as Māori and another ethnicity. Identifying only as Māori also correlated with living the rural New Zealand.

In terms of employment discrimination discrimination, employers would not know whether a Māori job applicant identified as only as Māori also with another ethnicity, so discrimination is not a good explanation of Māori disadvantage because of this counterfactual. A major driver of Māori disadvantage is simply unknown to discriminating employers as a basis for their action.

There was an editorial in the Dominion Post, which I cannot find online,  and the New Zealand Herald. The latter said:

The Government is being prodded to recognise that Maori deprivation has more to do with socio-economic factors than ethnicity.

This was the conclusion of a report by the Labour Department’s senior research analyst, Simon Chapple. Helen Clark might well have had that finding partly in mind when she referred to a lot of water having gone under the bridge since the Government first formulated legislation.

Mr Chapple said, in essence, that place of residence, age, education and skills had more to do with poverty than race. In areas such as South Auckland, Northland and the central North Island, there were poor Maori, but there were also poor Pākehā and poor Pasifika.

The Minister attacked him and the paper as well for contradicting the Minister’s claim during the election campaign that everything got worse for Maori in the 1990s.

image

Real equivalised median household income rose 47% from 1994 to 2010; for Māori, this rise was 68%; for Pasifika, 77% (Perry July 2014)

See Karen Baehler’s Ethnicity-based research and politics: snapshots from the United States and New Zealand for more information and a comparison with the similar response to Daniel Patrick Moynihan’s The Negro Family: A Case for National Action in 1965.

About a quarter of Negro families are headed by women. The divorce rate is about 2 1/2 times what it is [compared with whites],” Moynihan said. “The number of fatherless children keeps growing. And all these things keep getting worse, not better, over recent years.”

Moynihan, now retired from the United States Senate, was a senior official in LBJ’s Labor Department in 1965. He wrote his report on a typewriter over a few weeks and had the publications office in the basement of the Labor Department print 100 of them, marked “For Official Use Only.”

  • He warned about the breakdown of the African-American family where deprivation and disorganisation had formed their own vicious circle.
  • Many civil rights leaders had labelled Moynihan’s report a subtle form of racism because of its unflattering portrayal of the black family (Wilson 1987).
  • These accusations of racism helped make the breakdown of the family a taboo subject and social policy in the USA

see The Moynihan Report Revisited: Lessons and Reflections after Four Decades for a review by the best and the brightest in American economics and sociology on Daniel Patrick Moynihan’s prophetic warnings. Holzer says, for  example:

Moynihan was extremely insightful and even prescient in arguing that the employment situation of young black men was a “crisis . . . that would only grow worse.”

He understood that these trends involve both limits on labour market opportunities that these young men face as well as skill deficits of and behavioural responses by the young men themselves.

More children are growing-up without a working father living in the home and glean the awareness that work is a central expectation of adult life (Wilson 1987, 1996).

Single-parent households increased from 13 per cent of all Māori households in 1981 to 24.4 per cent in the 2006 Census. In the 2006 Census, 70 per cent of Māori single parent households were on a low income compared to 15 per cent of other Māori one family households (Kiro, Randow and Sporle 2010).

Most of the skill gaps that are present at the age of 18 – skill gaps which substantially explain gaps in adult earnings and employment in all groups – are also present at the age of five (Cunha and Heckman 2007).

There is much evidence to show that disadvantaged children have lower levels of soft skills (non-cognitive skills): motivation, persistence, self-discipline, the ability to work with others, the ability to defer gratification and plan ahead, etc. (Heckman 2008). Most of the skills that are acquired at school build on these soft skills that are moulded and reinforced within whānau.

When I started working on labour economics in 2007 I found that the labour economics of Māori was very narrowly written and stayed well clear of the minefield that Simon braved about how ethnicity does not matter much to Māori social disadvantage.

The application of John Rawls difference principle to New Zealand

An urban legend in New Zealand is that income inequality is going from bad to worse.

Since the mid 1990s to around 2011 there was a small net fall in New Zealand’s income inequality trend line in the graph for the Gini coefficient for the income distribution for New Zealand shows. inequality in New Zealand is similar to that in Australia, Ireland, Canada and Japan.

gini coefficient nz

Source: Ministry of Social Development (2014)

Taxes and transfers have reduced inequality in New Zealand when measured by Gini coefficients, but the trend is been relatively stable for many years.

gini after income transfer

Source: Ministry of Social Development (2014)

Rawls pointed out that behind the veil of ignorance, people will agree to inequality as long as it is to everyone’s advantage. Rawls was attuned to the importance of incentives in a just and prosperous society. If unequal incomes are allowed, this might turn out to be to the advantage of everyone. Robert Nozick said that:

Political philosophers must now either work within Rawls’s theory or explain why not.

The groups that have been doing best in New Zealand have been Maori and Pasifika. In real terms, overall median household income rose 47% from 1994 to 2010; for Maori, this rise was 68%; for Pacific, 77%!

image

Source: Ministry of Social Development (2014)

The large improvements in Māori incomes since 1992 were based on rising Māori employment rates, fewer Māori on benefits or zero incomes, more Māori moving into higher paying jobs, and greater Māori educational attainment (Dixon and Maré 2007).

Maori unemployment reached a 20-year low of 8 per cent from 2005 to 2008. Labour force  participation by Maori increased from 45% in the late 1980s to about 62%  in the last few years.

Most of the remaining income disparities between Māori and non-Māori flow from differences in educational attainment and demographic and socio-economic characteristics including household composition (Chapple 2000; Maani 2004; Dixon and Maré 2007).

How much of the massive increases in incomes over the last 20 years spread throughout the entire community are you willing to give up for a little more equality? How much of your income will you donate to charity to lead the way?

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