Rapidly declining poverty

Poverty levels in New Zealand are often talked about, and disputed. What shouldn’t be disputed is a significant decline in the percentage of people living in poverty in the world over the last 200 years.

Rapid population growth meant that the number of people living in poverty increased – until recently, when that began a decline as well, although there still about a billion people living in ‘extreme poverty’.

Our World in Data has details on poverty levels.

Almost all people in pre-modern times lived in poverty. This has changed dramatically over the last few decades; more and more people have left the extreme poverty of the past behind.

In 1820, the vast majority of people lived in extreme poverty and only a tiny elite enjoyed higher standards of living. Economic growth over the last 200 years completely transformed our world, and poverty fell continuously over the last two centuries. This is even more remarkable when we consider that the population increased 7-fold over the same time (which in itself is a consequence of increasing living standards and decreasing mortality – especially of infants and children – around the world).

In a world without economic growth, an increase in the population would result in less and less income for everyone, and a 7-fold increase would have surely resulted in a world in which everyone is extremely poor. Yet, the exact opposite happened. In a time of unprecedented population growth we managed to lift more and more people out of poverty!

PovertyDecliningPercentage

Even in 1981 more than 50% of the world population lived in absolute poverty – this is now down to about 14%. This is still a large number of people, but the change is happening incredibly fast. For our present world, the data tells us that poverty is now falling more quickly than ever before in world history.

The first of the Millenium Development Goals set by the UN was to halve the population living in absolute poverty between 1990 and 2015. Rapid economic growth meant that this goal  – arguably the most important – was achieved (5 years ahead of time) in 2010.

The number of people living in extreme poverty increased until the 1970s but since then has decreased with increasing rapidity. People who oppose neoliberalism say they want to return things to how they were before the 1980s.

PovertyDecliningAbsolute

There is still a large poverty problem – about a billion people still live in extreme poverty. But if the recent trend continues this should reduce significantly and quickly

A primary reason for reduced poverty is economic growth.

In 1820 only a few places in the world achieved economic growth – and only to a rather small extent. The progress of the last 200 years was achieved as economic growth brought higher incomes to more and more people in the world.

A correlation between he relation between average income and the share of the population that lives in absolute poverty suggests that in a society with an average income around 10,000 International Dollar, absolute poverty is abolished.

Source: Max Roser (2016) – ‘World Poverty’. Published online at OurWorldInData.org. Retrieved from: http://ourworldindata.org/data/growth-and-distribution-of-prosperity/world-poverty/

The current Purchasing Power Parity conversion factor for New Zealand is 1.47 so 10,000 international dollars equates to $NZ14,700 average income (source)

 

Must work harder Anthony

Anthony Robins (at The Standard) has praised Lizzie Marvelly’s  poverty piece at The Herald and makes a suggestion to the media – while he claims to be an academic he wants them to publish things he agrees with (he calls that fact-based narrative) and to not publish things he disagrees with (he calls them execrable nonsense and isolated and inconsistent snippets).

He does this in a footnote to What to do about poverty (and a suggestion to the media).

Footnote (I’m an academic, I love footnotes!) on a suggestion to the media. Almost everything you publish is a piece in isolation. There is a better way.

Take The Herald for example. You publish Marvelly’s piece on poverty today, just a week after (re)publishing Whyte’s excerable nonsense. If you had any kind of overview / foundation of established fact / ongoing context on the topic of poverty you wouldn’t be publishing such wildly inconsistent pieces (the Whyte article would have been rejected as the nonsense that it was).

Take climate change as another example, no responsible media should be publishing denier nonsense these days.

Now you (the responsible media) might say that you’re offering a range of opinions. But when some opinions are clearly and provably nonsense that excuse is just an abdication of responsibility. It’s laziness, clickbait, and harmful.

I guess I’m asking for context and sanity checking in the media. Fact-based narrative instead of isolated and inconsistent snippets. Harder work, but much better for everyone.

So Robins praises Marvelly, who shames and guilts anyone who won’t go along of her framing of ‘poverty’ in New Zealand and her vague suggested solutions.

And he wants the media to reject opinions that don’t fit with his views. That certainly isn’t better for everyone.

It’s harder work providing balance and a wide range of views, even if they might not be the same as your own. And much better for a relatively free and democratic society.

Footnote

Related to this are comments by ‘weka’ at The Standard.

On the Open Mike discussion on Marvelly:

The other problem I have with this is that it allows the deserving poor memes to continue which in turn allows the neoliberalis to keep treating so many people like shit.

I get why child poverty is focussed on. For socially intelligent people, if you address child poverty you are in fact addressing family poverty (not so much for the neoliberals and socially inept), and that in turn creates more healthy societies.

‘Socially intelligent’ (people she agrees with) versus socially inept (people she disagrees with).

And in response to Robins’ post:

Good punchy post r0b.

Re the footnote, does this mean the standard will no longer be publishing comments that are AGW denialist or poverty denialist? I hope so (although I appreciate the work involved may not make that possible).

She wants even more censorship at The Standard than Robins suggests for the media.

And Wayne Mapp takes Robins to task:

This item by Anthony Robins seems more like a request for Herald censorship than having a contest of ideas. It seems that you would prefer that arguments and positions you don’t like not to be published.

On climate change, while i accept that it is happening and is manmade, there does seems to be a genuine scientific debate about the rate of change. Surely a legitimate matter for the media to report.

Whyte’s piece was clearly an headed as an opinion piece, and not from a regular Herald columnist. His basic idea, on the best way to measure poverty, is clearly not nonsense. There is a genuine debate about whether poverty should be measured on whether a child is deprived of things that we see as essential in New Zealand, or whether a percentage of average incomes will in essence give the same answer.

If you disagree with his theme so strongly, submit your own item to the Herald.

More broadly modern media in all its forms allows any views to be aired. Or should these debates be confined to new Media, and that old media be tightly regulated. Just writing that sentence shows the impossibility of that. I for instance subscribe to The Spectator. There would not be one view expressed in The Spectator that you would agree with.

So what? That is what free speech means.

But forums like The Standard aren’t so interested in free speech. They seem want to want free speech as long as you are from the labour left and don’t threaten their opinions with alternative views or awkward questions.

 

 

 

 

What to do about guilting and poverty

The poverty campaign continees today in the Herald: Lizzie Marvelly: The only debate is what to do about child poverty. Who is Lizzie Marvelly?

One of the best things to do about ‘poverty’ in New Zealand is to stop calling it poverty.

There are serious issues involving deprivation, hardship,  income and social inequities.

But in trying to frame it as poverty, in particular child poverty, campaigners have alienated people that would otherwise be more than happy to see real problems dealt with better by the Government.

Anti-poverty campaigners have overstated their case by using a term that is widely seen as inappropriate in New Zealand. They keep using a Godwin equivalent term and fail to see that it is counter-productive to their cause.

Marvelly says:

Poverty isn’t generally associated with the Kiwi childhood.

She’s right, and that’s the problem with trying to address it.

I… wonder whether the people asserting that poverty isn’t an issue in New Zealand have ever left the comfortable bounds of their own privileged neighbourhoods. I wonder whether they realise just how ignorant they are.

Marvelly is the one who is ignorant, of the problem she is a part of. Most people realise there are social and income and would like to see more done about them.

But they don’t like being preached ‘poverty’ and they are hate being guilted by those who are promoting a misguided agenda.

What is poverty? It’s a question that’s been given a considerable amount of airtime. While a number of thresholds and frameworks have been suggested, for a certain group of people, none will ever be good enough, for if we accept the validity of a measure we are then duty bound to accept what it is telling us.

That sounds like nonsense.

In a country where an unacceptable number of children live below the much-debated poverty line, we are becoming accustomed to hearing the lives of Kiwi kids and their families being thrown around as political hot potatoes.

While we can argue about poverty, its definition, origins, and how it is conceptualised until we’re blue in the face, such meaningless politicking does nothing to show people the reality of poverty.

But the reality of ‘poverty’ in New Zealand is that it is a term that is counter productive to addressing real problems.

The idea that people living in poverty are somehow to blame for their fate is attractive if one wants to absolve oneself from any sense of responsibility, but it is a notion that I find deeply sad.

I find it sad that Marvelly blasts anyone who is repelled by her own blame game.

When did we become so hardened and self-centred that we began to believe that those poorer than us deserve their suffering? When did we become so divorced from our own communities that we stopped caring about the families around us?

She is making things up about anyone who won’t buy into her narrative. This is not going to win over any support. It alienates people who care but don’t like being abused.

Our political parties found that they could shelve their disparate ideologies to sort out superannuation … why can’t they show our youngest and most vulnerable citizens the same level of care?

Mravelly must have missed all the party arguments over how to deal with the escalating cost of superannuation  over many years.

The wellbeing of our children should never be up for political debate.Nor should we feel disempowered.

The wellbeing of our children is our our responsibility – ‘our’ meaning parents and wider families.

Does “should never be up for political debate” mean that parents and families should be able to ask for and get whatever they want from the Government without any debate?

What the heck does ‘feel disempowered’ mean?

There are so many things we could do to make the lives of Kiwi kids better: feeding kids in school, bringing back a means-tested child benefit like the one scrapped in the “mother of all budgets”, requiring a warrant of fitness for rental properties to prevent children growing up in cold, damp, leaky houses, and simply helping out in our neighbourhoods.

The first step, however, is for us to look out into our communities and really see other people, to realise that even in the most privileged areas, poverty is just five minutes down the road. It’s not a conspiracy. It’s real.

The first step is to drop the ‘poverty’ framing. It repels rather than attracts support.

The second step is to stop guilting and blaming everyone who doesn’t accept the framing of people like Marvelly.

And then we need identify issues and problems intelligently and responsibly, and consider what might be the most effective way of dealing with them with limited and competing resources.

Poverty not black and whyte

Poverty in New Zealand is examined again, this time by ex ACT leader Jamie Whyte in Poverty statistics suffer from paucity of common sense (NZ Herald).

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).

For example, the Herald recently published an article by Susan St John, spokeswoman for the Child Poverty Action Group, that claimed 220,000 children live in poverty because they “fall under the stringent 50 per cent after-housing-costs poverty line”.

Alas, the measure is not stringent; it is ridiculous.

Whyte goes on the explain why he thinks the claims of poverty in New Zealand are ridiculous.

Why would anyone use such a preposterous definition of poverty? Interviewed byThe Guardian, British poverty campaigner Peter Kenway defended it on the grounds that “it is a simple and reliable statistic which has played a huge part in propelling poverty up the policy agenda.”

It is far from reliable, and what it “pushes up the policy agenda” is not really poverty but inequality, which, in rich countries, is not the same thing. Poverty statistics based on this measure are misleading anyone who believes them.

Or the so called poverty statistics are being misused by people promoting an agenda with hints of socialism.

David Farrar agrees at Kiwiblog in Whyte on poverty.

And there is both strong criticism and agreement in a discussion at The Standard.

Weka:

Good grief. Couldn’t get past the first paragraph. Since when has there been free ‘medical’ care in NZ? What a dick.

Quite a bit of medical care is free for quite a few people in New Zealand.

Lanthanide:

Looks like a pretty reasonable article, to me. He eventually does at the end say the statistic is measuring inequality, not poverty, which I think he should have mentioned much earlier (short attention spans and all that). Also his sudden overuse of the word ‘pauper’ was strange.

Yes, Whyte’s repeated use of the term ‘pauper’ was odd, it seems as out of place in a New Zealand context as ‘poverty’.

This exchange illustrates part of the problem with the poverty campaigning.

maui:

I think what the poverty campaigners are trying to highlight is the people going without proper housing and proper food (amount and quality). In the 1st and 3rd world’s I would say this is a pretty good definition of poverty.

Lanthanide:

Then they should talk about that, instead of talking about the number of people who live in a household with less than 50% of the median household income.

But even defining poverty as “going without proper housing and proper food” can invite debate over what is judged proper housing and food.

The poverty debate is far from black and whyte.

Poverty is a State of Mind

Guest post by Alan Wilkinson

How to define poverty in developed nations is a subject of much earnest angst and statistical controversy.  The dictionary definition such as “The state of being extremely poor” invites the question of whether, in our typically mixed capitalist/socialist states with welfare safety nets, anyone really qualifies compared with the worst of the undeveloped world.

To meet that challenge, various “internally relative” economic measures are promoted – such as the current “60% of the median household income” which is currently popular in New Zealand and has been adopted by the Commissioner for Children.  This kind of measure is then extrapolated into statistical measures of inequality based on distributions of income and/or wealth within these countries.

Finally, these statistical measures of inequality have been compared across nations in studies analyzing whether inequality, changes or measures to deal with it affect economic growth.

Further complicating the definition are the historic improvements in wealth, health and standard of living across developed nations.   The elderly are inclined to scoff at claims of hardship such as cold, uninsulated houses and lack of heating or appliances compared with the Spartan homes of their youth.

Finally, there is the issue of lifestyle choice.  Some in wealthy nations may choose to live a simple, non-materialistic life perhaps living off the land in an isolated rural or island location.  By economic measures of income and wealth they may be judged as poverty stricken, but in reality their lives may be satisfying and even idyllic.  In less extreme examples, very many will choose an occupation and way of life that gives them freedom and less stress than an alternative which may provide a higher and/or more risky income or potential wealth.

So we must come to the conclusion that economic measures are a very inadequate assessment of poverty and are never likely to produce agreement on their relevance or effective action to make improvements.  That leads to thinking about the real causes of poverty hardship in our developed societies, particularly as they affect children.  These are not hard to find.  By the time they begin school at age 5 there are huge differences in the abilities and experiences of most poor vs wealthy children.  Not only do these never recover but they widen as children grow older.  The consequence is that these poor children have drastically reduced options in life and vastly less chance of economic success.

In short, real poverty is a state of mind that cripples all future prospects.  Worse, it transmits powerfully from one generation to the next.  This is the curse of stupid beliefs manifesting in destructive behaviours with many aspects.   These include:

  1. Disbelief in education
  2. Belief in violence to solve conflicts
  3. Valuing power over kindness
  4. Disregard for personal or private property
  5. Lack of trust and disregard for the value of trust
  6. Disregard for sexual integrity
  7. Disbelief in reliability and honesty
  8. Disbelief in goal setting or working to achieve goals
  9. Disbelief in investing in the future
  10. Belief in instant gratification
  11. Disrespect for self and everyone else
  12. Rejection of individual and family responsibilities

That is real poverty:  permanent, pervasive and self-perpetuating.  Other people can be economically poor, for example many recent immigrants or young people, but with the right ingrained beliefs that will only be temporary.

Just as individual poverty is best assessed on the quality of the individual’s minds, so it is with nations.  An economically poor nation with good beliefs will not stay poor and will not feel poor.  Honest Government maintaining peace and supporting education, personal freedom and free and open markets will create wealth and prosperity.  The transitions in Asia since WW2 demonstrate the possibilities.  Once again, the personal stupid beliefs above manifest in a country’s leadership or in any significant portion of the population are a recipe for national poverty.  So too are religious, racial and tribal hatreds and conflicts.

In summary then, poverty is best assessed on the basis of the above beliefs and consequential behaviours.  That leads to the conclusion that poverty is best addressed by changing those beliefs and cannot be fixed simply by redistribution of income or wealth.  Almost certainly doing the latter alone will merely facilitate greater and faster spread of the destructive beliefs that comprise real poverty.

More children “in poverty”

The Children’s Commissioner’s says that Nearly one third of children live in poverty – report.

Child poverty rates are on the up and nearly 30 percent of children now live without the basics, according to a new report by the Children’s Commissioner.

305,000 New Zealand children now live in poverty – 45,000 more than a year ago.

Sadly that’s more likely to invoke shrugs of indifference rather than outrage.

A major problem is that this is a statistical measure. While it points to real and serious issues most people’s perception of poverty is quite different to how they see New Zealand standards of living.

The report says nearly one in three children now live in poverty – defined as being in a household earning less than 60 percent of the median income after housing costs. Fifteen percent live in a cold house, lack decent clothing and go without fruit and vegetables.

By all those measures but one I grew up in poverty. I had plenty of fruit and more vegetables than I wanted, because we grew our own and swapped with neighbours. But money, lack of clothes and footwear and a cold house were a way of life for me.

Children’s Commissioner Russell Wills said the report was not aimed at policy makers.

“The public of New Zealand needs to understand the impact of poverty on children,” he said.

“The better our collective understanding and the more support there is to invest in these kids, the more support governments will have to invest in these children. So that’s the change we want to see.”

Dr Wills said the government was making some good moves, like insulating more homes and increasing benefits.

While the report did not make any formal recommendations, he said the government needed a more overarching plan to deal with child poverty.

“Each of these ad hoc things the government does doesn’t add up to a greater whole, and that’s why we need a plan.

“We need to set targets to reduce the number of children living in poverty.”

The Commissioner’s report also pushed the blame for child poverty off individual parents.

Lack of money and poor standards of living are real problems for many people.

But the poverty issue as framed is unlikely to outrage or prompt pressure to do much about it.

Most people don’t liken New Zealand poverty to international poverty.

The ‘collapse in poverty’ and ‘the Great Migration’

According to a report at The Telegraph a collapse in world wide poverty is feeding a ‘Great Migration’ that is likely to last for decades.

Prepare yourselves: The Great Migration will be with us for decades

It is not war, but money, that drives people abroad. That is not going to change any time soon

War must be a factor in prompting people to migrate. But it’s also true that many of those migrating by sea and by land from Africa and the Middle East into Europe must have money to finance their movements, whether they pay people smugglers or do it on their own.

When the crew of HMS Bulwark first fished immigrants out of the Mediterranean, they were expecting to find the world’s hungry, wretched and destitute. Instead, they found them relatively healthy, well-dressed and carrying mobile phones and credit cards, which they intended to use upon arrival in Italy.

The military learnt then what politicians are only slowly beginning to work out – that this is not simply a refugee crisis. The world’s poor are on the move because they’re not quite so poor as they used to be, and can afford to travel. A great migration has begun, and it could be with us for decades.

A report on the news right now – there has been an influx of 20,000 refugees/migrants onto one Greek island alone, Lesbos. “As soon as people are processed more arrive”.

This Great Migration was not expected because, for years, politicians believed that there would be less of it as poor countries became richer. Give aid, not shelter, ran the argument. “As the benefits of economic growth are spread in Mexico,” Bill Clinton once assured Americans, “there will be less illegal immigration because more Mexicans will be able to support their children by staying home.”

When José Manuel Barroso led the European Commission, he made the same argument: third world development will tackle the “root causes” of the problem. In fact, the reverse is true.

Never has there been less hardship; since Clinton’s day, the share of the population in extreme poverty (surviving on less than $1.25 a day) has halved. Never has there been less violence: the Syrian conflict is an exception in a period of history where war has waned. It might not feel like it, but the world is more prosperous and peaceful than at any time in human history – yet the number of emigrants stands at a record high. But there is no paradox. As more people have the money to move, more are doing so – and at extraordinary personal risk.

So the Great Migration is a side-effect of perhaps the greatest success of our times: the collapse in global poverty. The Washington-based Center for Global Development recently set this out, in a study drawing on more than a thousand national censuses over five decades.

If you misjudge the refugee crisis, you incubate a political crisis: this is the lesson that David Cameron has learnt.

We’ve seen similar here over the past week.

Efforts intended to help can end up causing harm, costing more lives. Since the Italian navy decided to send rescue missions to the Mediterranean, the number of people making the crossing (and perishing) has trebled.

Doubtless Angela Merkel meant well when she invited every Syrian to apply for asylum in Germany. But she will be toasted by the new breed of people traffickers, who will now have far more families to extort and leave stranded in Budapest or pack into boats on the coast of Libya.

Allowing and aiding mass migration encourages more of it. The Syrian migration may be only just cranking up.

So there is a growing dilemma – propsective migrants will have been encouraged by the surge in refugees successfully breaking through borders in Europe.

The Great Migration is a 21st century problem, far bigger than Syria and bigger than the authorities in Brussels seem able to comprehend. To panic now, as Mrs Merkel is doing, will just bring more to panic about. The solutions of the last century – refugee camps, or the notion that you can stem the flow of migrants with foreign aid – need to be abandoned, and a new agenda needs to be forged. Europe, in short, needs to begin a new conversation.

It’s a conversation we should also have in New Zealand. Our geographic isolation makes ikt far easier for us to control how many migrants make it here. But the ‘humanitarian’ and political pressure to take may more migrants has significant implications for New Zealand’s future.

A photograph of a drowned child is heartbreaking, but should not change policy: a botched response can lead to many more dead children. Hundreds of Yemeni children will likely starve this winter, victims of its civil war – we won’t see the pictures, so we’re unlikely to see anyone petitioning Parliament about them. But it’s no less of a tragedy.

Rather than media driven “we must do much more right now” perhaps we should be looking at how ‘the Great Migration’ may impact on us in New Zealand over the next few years and the next few decades.

It could have much more impact here than any climate change.

Can ‘poverty’ be a habit?

Poverty is currently one of new Zealand’s big issues.

National’s approach has been to make financial and business conditions conducive to economic and employment growth, to incentivise and assist unemployed people to get jobs, and to target the worse off with additional assistance.

Labour’s approach is to criticise National’s approach.

Green’s approach is to give the poor much more money and to guarantee them comfortable living conditions, seeing this as a right regardless of any individual’s capability or willingness to work.

The hard right want the Government gutted and for everyone to manage on their own – swim or sink.

The hard left (including some Greens) accuse the Government of deliberately making the poor poorer so the rich can get richer – I’ve never seen anyone explain how that would work.

Some people are not competent to manage their lives or their finances so a decent society should support them.

There are certainly hard luck stories that result in people being poor.

But why, generally, do people who have had money and go broke manage to climb back up the money ladder? While others seem to start poor and remain perpetually poor? Can poverty be a habit?

I saw a link to an article by Thomas Worley on Facebook. He is described:

About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night.

For five years, Tom observed and documented the daily activities of 233 wealthy people and 128 people living in poverty. He discovered there is an immense difference between the habits of the wealthy and the poor. During his research he identified over 200 daily activities that separated the “haves” from the “have nots.” The culmination of his research can be found in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals.

The article: Will Your Child be Rich or Poor? 15 Poverty Habits Parents Teach Their Children

When I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life I always begin my presentation by asking three questions:

“How many want to be financially successful in life?”

“How many think they will be financially successful in life?”

Almost every time I ask the first two questions every hand rises in the air. Then I ask the magic third question:

“How many have taken a course in school on how to be financially successful in life?”

Not one hand rises in the air, ever. Clearly every student wants to be successful and thinks they will be successful but none have been taught by their parents or their school system how to be financially successful in life. Not only are there no courses on basic financial success principles but there are no structured courses teaching basic financial literacy. We are raising our children to be financially illiterate and to fail in life. Is it any wonder that most Americans live paycheck to paycheck? That most Americans accumulate more debt than assets?  That many Americans lose their homes when they lose their job? Is it any wonder that most Americans cannot afford college for their children and that student loan debt is now the largest type of consumer debt?

That sounds very similar to New Zealand. I was never taught any financial principles at home or at school. I left home and got my first full time job when I was sixteen and started to teach myself – and I learned to manage fortnight to fortnight with my pay (beginning at $66 a fortnight) from there with no plan for the future. I’ve learned and taught myself a few more things since then.

I’ve experienced how easy it is to get in a financial rut. And I’ve managed to do ok at times to. I certainly don’t regard myself as rich but I think I have a pretty good life overall.

I’ve never planned or aspired to making myself rich. Doing ok has been ok enough.

What about the hundreds of thousands of people deemed to being in poverty? Are they stuck there?

By today’s measures I grew up in poverty. It was tough times for my parents trying to manage on an orchard that was sold to them as frost free but was devastated by frosts at times, at one stage in two out of three years. At times both my parents worked elsewhere to survive. But the both ended up financially quite comfortable, able to live their later years as they liked.

But some people seem to start in poverty and remain stuck in poverty. Corley writes:

The fact is the poor are poor because they have too many Poverty Habits and too few Rich Habits. Poor parents teach their children the Poverty Habits and wealthy parents teach their children the Rich Habits. We don’t have a wealth gap in this country we have a parent gap. We don’t have income inequality, we have parent inequality.

My parents didn’t teach me to get rich, but at least they taught me to work hard and to battle away until I wasn’t poor.

Corley lists fifteen statistics that separate the rich from the poor.

  1. 72% of the wealthy know their credit score vs. 5% of the poor
  2. 6% of the wealthy play the lottery vs. 77% of the poor
  3. 80% of the wealthy are focused on at least one goal vs. 12% of the poor
  4. 62% of the wealthy floss their teeth every day vs. 16% of the poor
  5. 21% of the wealthy are overweight by 30 pounds or more vs. 66% of the poor
  6. 63% of the wealthy spend less than 1 hour per day on recreational Internet use vs. 26% of the poor
  7. 83% of the wealthy attend/attended back to school night for their kids vs. 13% of the poor
  8. 29% of the wealthy had one or more children who made the honor roll vs. 4% of the poor
  9. 63% of wealthy listen to audio books during their commute vs. 5% of the poor
  10. 67% of the wealthy watch 1 hour or less of T.V. per day vs 23% of the poor
  11. 9% of the wealthy watch reality T.V. shows vs. 78% of the poor
  12. 73% of the wealthy were taught the 80/20 rule vs. 5% of the poor (live off 80% save 20%)
  13. 79% of the wealthy network 5 hours or more per month vs. 16% of the poor
  14. 8% of the wealthy believe wealth comes from random good luck vs. 79% of the poor
  15. 79% of the wealthy believe they are responsible for their financial condition vs. 18% of the poor

Corley suggests:

Parents and our schools need to work together to instill good daily success habits as follows:

  • Limit T.V., social media and cell phone use to no more than one hour a day.
  • Require that children to read one to two educational books a month.
  • Require children to aerobically exercise 20 – 30 minutes a day.
  • Limit junk food to no more than 300 calories a day.
  • Require that children set monthly, annual and 5-year goals.
  • Require working age children to work or volunteer at least ten hours a week.
  • Require that children save at least 25% of their earnings or gifts they receive.
  • Teach children the importance of relationship building by requiring them to call friends, family, teachers, coaches etc. on their birthdays and to send thank you cards for gifts or help they received from anyone.
  • Reassure children that mistakes are good not bad. Children need to understand that the very foundation of success in life is built on learning from our mistakes.
  • Punish children when they lose their tempers so they understand the importance of controlling this very costly emotion.
  • Teach children that seeking financial success in life is good and is a worthwhile goal. Children need to learn what the American Dream is and that it is something to be pursued in life.
  • Children need to learn how to manage money. Open up a checking account or savings account for children and force them to use their savings to buy the things they want. They need to learn that they are not entitled to things like cell phones, computers, fashionable clothes, flat screen T.V.s etc.
  • Require children to participate in at least two non-sports-related extracurricular activities at school or outside of school.
  • Parents and children need to set aside at least an hour a day to talk to one another. Not on Facebook, or on the cell phone, but face to face. The only quality time is quantity time
  • Teach children how to manage their time. They should be required to create daily “to do” lists and these lists need to be monitored by parents. The goal should be to accomplish at least 70% of their tasks on their daily “to do” list.

And he concludes:

Wealthy people do certain things every single day that sets them apart from everyone else in life. Wealthy people have good daily success habits that they learned from their parents. These daily habits are the real reason for the wealth gap in our country and the real reason why the rich get richer. Unless we teach our children good daily success habits, and level the playing field, the rich will continue to get richer and the poor will continue to get poorer.

Food for thought. Especially for our politicians.

I’m sure that to an extent poverty can be a habit.

Should out Governments feed that habit or try and break that habit?

How many children ‘in poverty’?

John Key says that the Government will particularly target the 60,000-100,000 children living in most deprivation. Green co-leader Metiria Turei questioned Key in Parliament yesterday about the numbers, but came up with a few numbers of her own. Greens are campaigning to ‘end child poverty’.

End child poverty: Take the Step New Zealand should be the best place in the world to grow up. But for 285,000 Kiwi children currently in poverty, that’s just not the case. Persistent poverty damages a child for the rest of their life. And it damages our country. We’re spending over $6 billion a year on preventable crime, illness and lost educational opportunities – the direct cost of keeping kids in poverty. Many of our poorest children are excluded from getting the same support the state gives other kids who need it, because their parents don’t work enough. These kids need champions to make sure Parliament understands that ordinary New Zealanders want the best for all our kids, regardless of who their parents are

That’s “285,000 Kiwi children currently in poverty”. In Parliament yesterday Turei asked:

Is the Children’s Commissioner wrong, and are his experts who worked on the solutions to child poverty wrong, when they state that there are between 180,000 and 200,000 children who are materially deprived

But she also asked:

Did the Ministry of Social Development fail to give him the 2014 Bryan Perry report that showed that there are 260,000 children in poverty and that 205,000 of them are living in severe poverty, where their parents earn less than half the median income?

And:

Will the Prime Minister just admit that he has made up an Oliver Twist definition of poverty so that he can ignore some 200,000 New Zealand children who suffer from poverty every day?

So Turei and the Greens are quoting a number of numbers:

  • 285,000
  • between 180,000 and 200,000
  • 260,000
  • 205,000
  • 200,000

Greens seem to want to increase benefits to increase ‘incomes’, whether the parents are in work or not, and no matter what the deprivation. So what does Key base his number on?

It seems to me that the member picks and chooses her index depending on what suits her argument, but all I can tell the member is that if one looks at the number of children who are deemed to be at the most significant level of deprivation in New Zealand based on the Ministry of Social Development index, it is 60,000 to 100,000. But what I can say is that Bryan Perry’s new annual report—and the new edition will be out very soon—will make it quite clear that in terms of what they define as severe material hardship, there are between 60,000 and 100,000 children, and they have between nine and 11 conditions on the deprivation index.

Using actual measures of deprivation (or poverty) to target the worst problems won’t stop the Greens and others from accusing Key and the Government of not caring about kids and of deliberately keeping kids in poverty. —

Full draft transcript of questions and answers yesterday in Parliament.

Prime Minister—Statements 6. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei : How poor does a child need to be under his “definitional difference”, which he told Paul Henry about yesterday, when he claimed that there were only 60,000 to 100,000 children living in poverty?

Rt Hon JOHN KEY : The advice I have from the Ministry of Social Development material deprivation index is that there are indeed between 60,000 and 100,000 children who are living in more severe material hardship. They are children who, based on that index, lack nine to 11 items from that deprivation index.

Metiria Turei : Under his “definitional difference”, is a child living in poverty if their parents cannot afford to buy them fresh food, if they do not have two pairs of shoes, if they cannot afford a school uniform, and if they do not have their own bed? Rt Hon

JOHN KEY : I refer the member to the Ministry of Social Development’s material deprivation index.

Metiria Turei : Is the Children’s Commissioner wrong, and are his experts who worked on the solutions to child poverty wrong, when they state that there are between 180,000 and 200,000 children who are materially deprived—that is, they go without three or more essential items such as fresh food, warm clothes, their own bed, and good shoes?

Rt Hon JOHN KEY : It seems to me that the member picks and chooses her index depending on what suits her argument, but all I can tell the member is that if one looks at the number of children who are deemed to be at the most significant level of deprivation in New Zealand based on the Ministry of Social Development index, it is 60,000 to 100,000.

But I would say that this Government is very focused on all children, particularly those who are less well off, and there are degrees of how less well off they are.

That is why the Government introduced free GP visits.

That is why the Government has put more money into providers like KidsCan.

That is why this Government has worked alongside Fonterra and Sanitarium to provide free breakfasts.

That is why the Government has supported having social workers in all low-decile schools.

It is why the Government has introduced children’s teams to work with at-risk children and families.

That is why the Government has insulated every State house, and it is why the Government has worked to insulate 240,000 other homes and has given them clean heating.

This is a Government that, in the very worst of times in New Zealand, has maintained benefits and entitlements that provide support for the very children whom that member is talking about.

Metiria Turei : Did the Ministry of Social Development fail to give him the 2014 Bryan Perry report that showed that there are 260,000 children in poverty and that 205,000 of them are living in severe poverty, where their parents earn less than half the median income?

Rt Hon JOHN KEY : The member will note—if she wants to refer to that particular report that she is talking about—how consistently the numbers that she is talking about have been at that level of deprivation. In fact, there were about 240,000 to 260,000 children living in poverty under Labour, at the height of what was theoretically an economic boom.

But what I can say is that Bryan Perry’s new annual report—and the new edition will be out very soon—will make it quite clear that in terms of what they define as severe material hardship, there are between 60,000 and 100,000 children, and they have between nine and 11 conditions on the deprivation index.

Metiria Turei : Would the Prime Minister agree that by promising to tackle child poverty and then changing the definition of poverty to exclude most of the children who are actually poor, he is breaking yet another Budget promise?

Rt Hon JOHN KEY : I think the member is being extremely selective with the comments I have made. If she actually goes back and looks at the interviews that I have done on this topic ever since the last election, she will see that I have consistently said that there is a disagreement between ourselves and those who claim that there are 260,000 children in that category.

We have made it quite clear that we see a group of 60,000 to 100,000 as our priority. It does not mean that we do not provide either services or support for the wider group; we actually do. I listed a great many, and I will not repeat them now. But our primary area of focus and attention is on those who are most in need.

I think most New Zealanders, actually, would say that the Government having a focus on those who are in the worst of conditions is putting our resources in the right place.

Jacinda Ardern : Does he stand by his previous statements in this House that there are many measures of child poverty, in light of his position now that there is just one, material deprivation, which just so happens to be the smallest of all the measures that are used by the Children’s Commissioner?

Rt Hon JOHN KEY : I stand by the view that there is no one single measure, but I am simply saying that the material deprivation index, according to the advice that we have had from the Ministry of Social Development, is the best. That is one measure, but there is no one single measure of poverty in New Zealand, and I do not think there should be.

Metiria Turei : Will the Prime Minister just admit that he has made up an Oliver Twist definition of poverty so that he can ignore some 200,000 New Zealand children who suffer from poverty every day?

Rt Hon JOHN KEY : I think the member risks being a little bit silly. I listed a few moments ago a very wide range of support that we provide for all New Zealand children, and in some cases, obviously, the support is much more focused on those who are in need.

I have made it quite clear that I think there is a group who are in worse hardship than others, and that is supported by the material deprivation index, which evolved, actually, from the European equivalent.

It is a very thoughtful process that Bryan Perry goes through, and it looks at very detailed analysis. I am more than happy to have the debate with the New Zealand public, but I think you might find that the New Zealand public supports the view that those who are most in need deserve the most support.

That does not mean that other children do not get support; they actually do. But this Government is very focused on that group, and I think most New Zealanders would say that is the right thing to do. The member shakes her head, but if we followed her economic policies a whole million of New Zealand children would be in hardship because none of their parents would be in work.

Green’s ‘Kids Kiwisaver’ won’t save Kiwi kids

Metiria Turei has announced a Green “game changer” policy for children that she is “very proud of”.

Today we announced a game-changing savings policy that will give every New Zealand child the start in life they need and deserve; it’s called Kids’ KiwiSaver.

Too many New Zealand families are struggling to save for their children’s futures. The Green Party wants to give you a hand so your children get a decent shot when they turn 18.

Kids’ KiwiSaver is an important step towards giving every kid the great start they deserve. Here’s how it works:

  • The Government will put $1,000 into a Kids’ KiwiSaver account for every child at birth (parents can choose to opt out).
  • Each child living below the poverty line will then get a Government top-up of $200 every year until they turn 18 and any contributions the family makes to their child’s future, up to $100 annually, will also be matched.
  • For all other families, annual contributions up to $200 will be matched by the Government.

With careful saving, our policy means children could have a minimum nest egg of $12,900 by the age of 18 that they can use to help fund tertiary education, invest in their adult KiwiSaver account, or use to help with a deposit on their first home.

The Greens claim we have a dire situation right now with hundreds of thousands of kids living in poverty and they insist urgent action is needed.

This policy piles money into something that may or help in a decade or two. It does nothing for kids in deprivation now.

And in this release the policy isn’t costed.

Last year there were 57,142 births in 2014. That would cost $57 million under this policy.

And Greens claim there are 285,000 children living in poverty.

New Zealand should be the best place in the world to grow up. But for 285,000 Kiwi children currently in poverty, that’s just not the case. – https://home.greens.org.nz/endchildpoverty

That would be another $57 million per year.

So their policy is for spending of about $114 million per year that at best would have some long term benefit. It will do nothing for children while they are living in hardship.

The chances of National backing this policy are probably close to zero. It’s hard to see Labour giving it priority if they would support it at all.

This looks like a feel-good futile policy that’s likely to keep the Greens on the political sidelines.

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