50,000 families ‘working poor’

households — more than 50,000 homes — are living in poverty.

The report, published by the Human Rights Commission today, reveals who among us aren’t earning enough to live, and how many are falling below the poverty line.

In many ways, Sinoti, 47, is the kind of worker the report is talking about. She’s a woman, she’s from Samoa, she’s a cleaner on minimum wage. Those night shifts ended four years ago. Now, Sinoti works days, her sons are working and her husband is on a pension. But at the National Library, she’s on the minimum wage – $17.70. It’s a simple equation. Take-home wages $500 a week, rent $300, a 10-trip train ticket from Porirua to the city $51.

Poverty is measured in a few ways in New Zealand. The inwork poor report uses a poverty definition slightly higher than the target set by the Government’s Child Poverty Reduction Act: a household earning beneath 60 per cent of the median income, before housing costs are subtracted from the equation.

So, take median income – which in June 2019 was $1019 per week – draw a line at the 60 per cent mark (roughly $600 a week).

Of course, it’s not as simple. Such a wage may have a single member household above the poverty line, compared to a family of four. The data of each household is first passed through a flattening formula, so the income of a small family is comparable to that of a large family, giving a group which falls below the line.

To then determine just which working households were below the line, Auckland University of Technology researchers took data from Census 2013 household data and linked it to anonymised Inland Revenue and MSD data.

Pensioners were subtracted and self-employed households. A working household was defined as having one adult working for either wages or salary, for seven months in a year.

The result: Four in five households are working, and seven per cent of these below the poverty line. Only one per cent of these households are below the line for a full year. Many, 20 per cent, fall below the line for one or more months in a year.

And one in 10 children in working households are living below the poverty threshold.

AUT professor of economics Gail Pacheco, part of the report team, says the in-work poverty rate can double for specific population groups.

More than 12 per cent of singleparent households qualify as working and impoverished, and without Government support this jumps to 21.6 per cent — one in five. Families of Pacific and Asian ethnicity experienced above average rates of working poverty, at 9.5 and 9.4 per cent, compared to Pa¯ keha¯ families at 5.9 per cent.

The overall in-work poverty rate hadn’t change between 2007 and 2017, the report notes.