New Zealand's 'working poor' and the push to understand how many are struggling
Wellington City Mission is increasingly providing food security to working families.
You could work all week and have only $20 to show for it.
You could be mother-of-two Joanna, working a retail job in Henderson, with take-home pay of $550 eaten up by rent of $530 every week.
This isn't a story about rental prices in Auckland. This is a story about low wages, high living costs, and the working poor.
And it's a story that's increasingly told around the country.
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Unemployment is at its lowest in a decade - at 4.4 per cent in March - but wage growth has stagnated.
So you can get a job, but it might not pay the bills. Sitting between employment rates and wage statistics are the working poor - employed, but doing it hard.
With the political spotlight on poverty, a Government-backed study wants to answer the question: who are the working poor?
Some families are still struggling to provide for their children, despite being in fulltime work, or having several jobs. (File photo)
Ask Joanna, 49, who has been behind the counter at a major New Zealand retailer for almost 20 years.
Stuff has withheld her last name, and that of her employer, for privacy reasons.
It takes Joanna 40 hours at $20.40 an hour - $4 above the minimum wage - to earn the week's rent.
Her $550 weekly pay cheque is practically gone before it's in her hand.
A $70 accommodation supplement from Work and Income helps - it has just gone up from $40 - but it still won't cover the bills.
"I have to reapply for it every three months, which is insulting, I work bloody fulltime."
And it won't feed her two boys, who are at university. They each pay board of $140 a week, which helps put food on the table and keeps the lights on.
"They couldn't afford to pay more, because they're struggling students.
"If they wanted to move out and do their own thing, I just couldn't afford to stay here any more."
Wellington City Mission social worker Catherine McMillan with food parcels from the mission's food bank. Increasingly, the mission is providing food security to working families.
So what's Joanna left with? Not enough to pay for parking, of $25 a week, at the mall where she works.
"We kept getting tickets because we weren't paying for parking … so I've been riding a bike to work."
After two decades at the store, Joanna has taken up a trolley run every second Saturday for some disposable income.
At work, things are only getting harder. Nine staff have left in the past couple of months and none have been replaced, so she's looked at her options.
Rent isn't much cheaper elsewhere; she's considered leaving Auckland, but her two boys are here. And she worries about a lack of secure work elsewhere.
"I just need $10 an hour more. I need what we get paid fortnightly each week, then I'd be sweet."
Of course, that's not going to happen. So she sits tight, keeps to a strict budget, and doesn't ask the landlord to fix anything for fear the rent will increase.
But what if the car breaks down? Joanna has asked Work and Income for help before, and the response is a firm "no".
"They just say, 'You're on good money, your wage is good'."
For a working woman with two adult children, there's not much support on offer.
Wellington City Mission social worker Catherine McMillan says working families on low-wages can be without enough support options, despite struggling to get by.
At the Wellington City Mission, social worker Catherine McMillan has a single mother on her books who earns $800 a week.
It's a good wage, before you deduct $500 for rent and $300 for childcare.
"She's a nurse, she's got a degree and training. It's not just people who you might automatically think of - cleaners or checkout operators," McMillan says.
"Rentals are so expense. If they have to go for private rental … you can't find anything under about $350, and that will be a crappy little studio."
As part of its Mission for Families programme, the city mission has three on-the-ground social workers each with a caseload of over 20 families.
The needs are wide-ranging: advocacy at Work and Income, help with Housing New Zealand, health services, budgeting assistance.
And while a lack of decent income is often an issue, it's not what brings a family to the mission's service.
For McMillan's nurse, it was a referral from Women's Refuge. The mother had left a violent relationship, and needed assistance with getting back on her feet.
Wellington City Missioner Rev Tric Malcolm says it's becoming more common to find working people at the mission's food bank.
Wellington City Missioner the Rev Tric Malcolm says it's becoming more common to find working people at the mission's food bank.
"We've looked at budget, and we've looked at housing, and we've looked at entitlements, and we've looked at school fees - we've looked at everything that is possible to resolve - and we're saying to people, 'There is no way to resolve anything more and you still need food security'.
"We're masking the reality that these wages are not enough to survive on."
Malcolm advocates for a rise in the minimum wage to the living wage of $20.55, a fraction more than the Government's pledged minimum of $20 by 2021.
It will be a help, but no solution. Rent, living costs, and the living wage will all increase in the three years it will take for workers to receive that $3.50 an hour boost, she says.
"We work with a lot of people who might fit just above what the Government might define as the working poor, or the poverty line, but they're just not able to survive and have any kind of life that makes them thrive.
"Where do you put a line to say someone can survive? And what does it actually mean to live off what you earn?"
DRAWING A NEW LINE
Where the line should be drawn is what the Ministry of Business, Innovation and Employment (MBIE), Ministry of Social Development (MSD) and the Human Rights Commission (HRC) want to establish.
Led by the HRC, the three organisations are this month commissioning a study to define, measure and profile "households that cannot escape hardship despite containing individuals who are employed".
Due to be published in March 2019, tender documents suggest the work will inform future poverty reduction efforts.
"Poor children have poor parents … and often they are employed. These families are facing undue hardship, and this is a timely opportunity to understand and address the situation," the tender document says.
Much is already known. A 2017 MSD paper estimates 40 per cent of children in material hardship have working caregivers.
"Whether the estimate is 40 to 52 per cent, or more like 37 to 49 per cent, is not too important," the document says.
"The most important thing is that we know that a sizeable portion of the poor kids come from working families."
The same report estimated around 15 per cent earn less than 60 per cent of the median income, after housing costs, a widely used measurement of poverty.
In the European Union, working poor estimates averaged about 10 per cent of the population in 2014.
In the United Kingdom, workers in poverty were reported at 15.7 per cent in 2017, a 26.5 per cent increase in the past decade. Researchers in the United States estimate 19 per cent of the population may be working poor.
The effects of low wages - found in an 2018 MBIE report that analysed tax records - might be obvious to some.
Low-wage workers have more short-term jobs, hold multiple jobs at once, and find themselves on the benefit more often.
"Low pay is correlated with being female, working part-time, aged 20-29 years or over 65 years, holding low level of educational attainment, and being non-European."
Social policy researcher Charles Waldegrave who helped set the income poverty line for New Zealand in the 1990s.
Charles Waldegrave, a tireless chronicler of poverty in New Zealand, says a study into the working poor will more than affirm what's known.
"We've got the statistics for them. What the Government is worried about is what's happening to these people."
Waldegrave heads the independent and Lower Hutt-based Family Centre Social Policy Research Unit, which first published a measurement of New Zealand's poverty in 1995.
The income-based measurement - which was subsequently taken up by the Government - should make the basis of a working poor definition, he says.
Here's how the line is drawn: take all of the household incomes in New Zealand and apply a formula to flatten the scale, called equivalising, so the income of a large family is comparable to that of a small family.
Two measures are then applied to the median, or the half-way point in all incomes.
A person earning beneath 50 per cent of the median is considered impoverished by OECD standards.
In New Zealand - as with the EU and UK - a measure of 60 per cent below the median income, both before and after housing costs, has long been used.
Apply this measure to workers - in Waldegrave's view, those in full-time, part-time or casual work for the equivalent of six months of the year - and you have a definition for the working poor.
Whether the chosen definition will capture retail worker Joanna, or McMillan's nurse, is yet to be seen.
The Government may have shifted its view on the most relevant income poverty measure, with Prime Minister Jacinda Ardern's Child Poverty Reduction Bill asserting the 50 per cent of median income measure as the targeted poverty line.
Waldegrave says this is short-changing the very people the bill intends to help, and intends to make his view clear at a select committee hearing later this week.
The HRC and Children's Commissioner are also of the view the 60 per cent measure should be applied.
Nuance aside, Waldegrave says the implications of growing insecure and low-pay work will be made clear.
"You've got increasing numbers of people employed on contract work, as-and-when needed, and work that can just change at any time.
"Research consistently shows it leads to more ill-health, much lower life satisfaction, much more associated with crime, and lower educational attainment.
"All of the things we absolutely don't want in society."
Waldegrave is also an advocate for the living wage movement, his research setting the $20.55 rate for 2018.
"We pay low wages and work long hours, in New Zealand, by comparison to other like countries - it's a persistent problem."
Compared to New Zealanders, Australians earn on average 32 per cent more, Canadians 22 per cent and the British 9 per cent.
In lieu of forcing the market or boosting incomes, Waldegrave says an expansion of the mesh of Working for Families tax credits could offer many a reprieve.
"Tax credits are very helpful, and there's absolutely no question that poorer people need more income."
"New Zealand has the opportunity, and the moral obligation, to strive to free people from the burden of poverty," says Social Development Minister Carmel Sepuloni.
WILL IT WORK FOR FAMILIES?
An increase in Working for Families tax credits is coming in July 2018, which Minister for Social Development Carmel Sepuloni says will increase incomes.
Families with more than one child can anticipate as much as $26 a week more, and the threshold for the tax credit is increasing from $36,350 to $42,700.
"The Families Package will increase the incomes of thousands of Kiwi families facing rising living costs and food instability, as well as increasing the accommodation subsidy," Sepuloni said in an emailed statement.
"I think in some quarters there has been a very sad view that we must accept that the working poor will always be with us. I totally reject that.
"New Zealand has the opportunity, and the moral obligation, to strive to free people from the burden of poverty."
- Stuff
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