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Letter No.44
14 August, 1996
ROSEMARY McLEOD
on the POVERTY PROJECT
an essential summary
edited by The Jobs Letter
"Poverty is notoriously hard to define and measure, and its a volatile word to brandish in volatile times [...] Are we witnessing a highly politicised use of statistics that are so complicated that few people will bother to tackle them? The answer is probably yes..."
-- Rosemary McLeod
Columnist Rosemary McLeod has taken the NZ Poverty Measurement Project to task in a 2-part series of articles in the Dominion and reprinted widely throughout NZ. The Project in April concluded that 18.5% of NZ'ers were living in poverty, which they defined as having to get by on less than 60% of the NZ median income. The Project also found that a third of this country's children were directly affected (See Jobsletter No.37). McLeod disputes this, and points out that a Luxembourg Income Study (based around developed countries) uses a 50% median income benchmark as the level above which people can be expected to cope ... and says that it doesn't have to be considered a "poverty line" as such.
Using the Poverty Project's own figures, McLeod concludes that at the 50% median income level, only 5.5% of the NZ population would be arguably living "in poverty".
Rosemary McLeod believes that the income-measuring method alone is insufficient to measure poverty in NZ. She says it is considered to be inherently flawed, because it really measures income distribution more than poverty levels. A more difficult, yet more reliable, way of evaluating poverty is through budget studies ... although this also would be an extremely expensive task. For this you would need a randomly selected group of people whom the researchers would follow over a long period -- watching their income and how they spent it.
The Poverty Measurement Project did something similar in choosing focus groups for their study, which were based in Porirua, Lower Hutt and Wainuiomata. These methods were criticised by McLeod as not being random, and they didn't look at what people really did with their money rather than relying on their own assessment of their habits.
McLeod queries how much of what we describe as poverty is simply due to spending money on the wrong things. She quotes a DSW Social Policy Agency report which last year assessed people who sought budgetary advice. The report found that before people got budgetary advice, everyone on the survey was spending more than they got in income. After three months of help, the average weekly income of all of them had risen and all had surplus income. McLeod: "Partly, this was due to some people finding work, but it leaves open the question of how much poverty is simply due to bad money management ..."
Source - The Dominion 25 and 26 July 1996 "Lining up poverty statistics" and "Poverty extent less than claimed" by Rosemary McLeod.
see summary of Poverty Project findings in Jobs Letter No.37
also Charles Waldegrave defends the Poverty Project study
in Jobs Letter No.47
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