Not much done, lots more to do

– John Edmundson

As election day nears, you’d think it would be time for union leaders to raise workers’ needs in front of the politicians. The New Zealand Council of Trade Unions (CTU) has released its spin on the latest statistics summarising the socioeconomic state of New Zealand in the last decade.

The CTU’s assessment of the Ministry of Social Development’s 2008 Social Report, headed “Social Report: Lots done, more to do”, could best be described as a pro-Labour spin on some pretty mixed statistics for the last decade, a period dominated by the Clark Labour government.

“The social wellbeing of New Zealanders has improved since the 1990s with most social indicators moving in the right direction,” enthused CTU vice president Maori Sharon Clair. “Clearly there is more to be done. Low wages are still holding back the country, and 13% of households in poverty is 13% too many. In many indicators the trends are good, however,” Clair said.

Of course, she is right, in a “lies, damned lies and statistics” sort of way. But what does “most” social indicators actually mean? A look at the actual report reveals a much less praiseworthy result than the CTU spin would suggest. I encourage anyone interested to go to http://www.socialreport.msd.govt.nz and make their own assessment of it.

“There are better health outcomes reported compared with the 1990s. Life expectancy has improved for both males and females,” states Clair. This is true, and of course a good thing, but as the social report’s figures reveal, it’s been true almost without exception for the past 60 years. While welcome, the fact hardly warrants a round of backslapping by Labour and its acolytes.

“Early childhood education has improved between 1997 and 2007 – 11.3% for three-year-olds and 5.8% for four-year-olds.”

Such figures are, by themselves, of little value. Which children have gained from this and what is the quality of care like? These questions are a whole area of research in themselves. An answer to the first of them is present in the report itself, but conveniently omitted from the CTU’s whitewash:

“Year 1 children in low-decile schools (those that draw their students from communities with the highest degree of socio-economic disadvantage) are much less likely to have attended an early childhood education service than children in high-decile schools. In 2007, only 83% of new entrants in decile 1 schools had previously attended early childhood education services, compared with 97% in decile 6 schools and 99% in decile 10 schools.”

What does this reveal? Looked at another way, kids at decile 1 schools are 17 times more likely than kids at decile 10 schools to have had no formal early childhood education. It is inexcusable that the CTU found that fact not newsworthy, while highlighting the overall figures that put their party of choice, Labour, in a much more favourable light.

On secondary and tertiary education, the facts don’t look too flash either, especially for low-income people, although our intrepid spindoctors at the CTU would not have us see it that way. According to the report:

“Young people from schools that draw their students from low socio-economic communities are less likely than other young people to attain higher school qualifications. In 2007, only 49% of school leavers from deciles 1-3 schools (in the most disadvantaged communities) attained qualifications at NCEA level 2 or above, compared with 62% of those leaving deciles 4-7 schools and 79% of those leaving deciles 8-10 schools.”

“Income inequality has improved since the mid-1990s,” Sharon Clair said. “In 2007, 13% of the population was living in households with incomes below the poverty threshold of 60% of median income, after deducting housing costs, compared with 22% in 1997.”

However, reading the report:

“Income inequality rose between 1988 and 1991, briefly plateaued, then rose again from 1994 to 2004. Most of the observed increase in income inequality between 1988 and 2004 was due to a larger overall rise in incomes for those in the top 20% of incomes – around a quarter once adjustments for inflation are made. In that period, incomes for those in the bottom 20% of incomes decreased a little. Incomes for the middle 60% climbed more overall for those closer to the top 20% than for those closer to the bottom 20%.”

The biggest jump in income inequality during the period graphed in the report is from 1988-1992, the last years of the fourth Labour government and the first years of the incoming National government. Rises in income inequality have occurred at least as much under Labour as National. There has been an improvement in the period from 2004 on, but for the whole period from 1997 to 2007 there has been no improvement at all. Even for the 2004-7 period, when things were supposedly improving, the Gini coefficient for inequality remained the same (34).

As the report also notes, the OECD uses a different measure, and according to that New Zealand has actually got slightly worse. The biggest reason for the improvement noted in the CTU quote above is a gradual decline in poverty (by the NZ measure) during both Labour and National governments after the jump due to the National Party’s benefit cuts, which Labour has never addressed.

“At the workplace, our median hourly earnings increased over the ten-year period from $15.35 to $18.”

In itself, this appears to be an unqualified improvement, but it is far from complete. Actual take-home income is not given. Since “employment” for the purpose of this report is defined as anything above one hour a week, the figure is still pretty useless. If you’re $3 an hour better off but working fewer hours, you may not be much better off at all. And the number of men in part-time employment has almost doubled since 1986, so the absolute gains are probably not as good as the figures suggest.

The observation that “three-quarters of New Zealanders report satisfaction with work-life balance” is completely subjective and not of much value. People are more likely to report “satisfaction with work-life balance” if they earn less money, which suggests that as a meaningful measure of working people’s wellbeing, this particular piece of information is useless. If a “poor but happy” workforce is a worthy objective, then this is something to celebrate. Any trade union movement whose first loyalty was to workers, and especially to the lowest paid workers, would have known better than to trumpet such meaningless data as good news, instead of facing up to the hard new facts of growing worker poverty. Workers in debt now make up nearly half of those seeking help from budget advisory services. Previously, most new clients were beneficiaries. Today, the Hastings Budget Advisory service reports that 42% of its 129 new clients in the three months ending June 2008 were workers in paid employment, whose wages did not meet their expenses. This appears to be a national trend; the New Zealand Federation of Budgeting services had 5864 wage and salary earners asking for help alongside 14,454 beneficiaries last June.

Sharon Clair concluded the CTU’s statement by saying that we are seeing progress for low-income people, but that there is still more to be done. Clearly this statement has required a highly selective reading of the data, which show very mixed results. In many cases the statement does not hold up when national averages are analysed more closely and low-income earners are seen to have missed out on the gains.

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