What makes you poor?
What does poverty look like in New Zealand? Who is poor? How did they get there? What’s keeping them there? How can we assist them?
Informed by our research and a significant consultation process with policy-makers, academics and practitioners, Maxim Institute has released the second paper in our series exploring the problem of poverty in New Zealand, seeking to answer questions like these. The ultimate goal of this project is to develop and advocate for policies that will transform the lives of struggling New Zealanders. But before we tackle poverty we need to know precisely what we’re dealing with. This is why defining and measuring it well matters. We’ve made nine recommendations that we think will give us a sharper, deeper understanding towards more effective solutions. Here’s a few.
Definition-wise, poverty in New Zealand today means more than just not starving. Poverty is about a lack of resources preventing people and families from being able to meet their needs. These needs are determined by what society thinks is a minimal standard. This standard is relative, in the same way like being short or tall is relative. In India, where the average height is around 160cm, I’d be tall. In the Netherlands, where it’s up to 180cm, I’d be short. The reference point here is the average height, for poverty, it’s the living standards and expectations of the average kiwi. As this average reference point changes with new technology for example, so does what it means to be poor and what is needed to participate in society.
We think it’s important that a poverty measure should reflect this reference point well, and should be meaningful and easy to understand for most New Zealanders. The semi-official thresholds like sixty-percent below the median income have some merit, but fail to do these things. They can be confusing too. We recommend conducting surveys and focus groups of New Zealanders of all walks of life to put together a basket of goods that represent the bare necessities to participate and belong in society. If people or families have enough income to purchase this basket of goods, but choose to spend it otherwise, they are not poor.
This innovation would better identify who was poor and better resonate with the public, but it wouldn’t be particularly helpful for informing and guiding policy solutions. Those identified as “below the line” are very different, and no one-size-fits-all approach is going to have long-lasting effects. Given this, we’ve also recommended a multi-dimensional measure that will identify and cluster people and families with similar combinations of risk factors likely to trap and keep them in poverty. This way, policymakers and practitioners can work together to target and tailor solutions for particular “poverty types.”
These recommendations are nothing more than first steps in a much longer journey—better informed policies for better outcomes. This needs to be a shared journey, one we walk with our families, friends and fellow New Zealanders missing out on what most of us take for granted.