50,000 families ‘working poor’

The belief that work pulls a person out of poverty is common. But a new study reveals 7 per cent of working Kiwi families – or nearly 51,000 homes – are living in poverty. Thomas Manch reports.

Mareta Sinoti spent years working through the night, vacuuming, spraying, and scrubbing the offices which keep New Zealand running.

Her working day began at 6pm at the High Court in Wellington. It was then a short midnight walk to her next job, at Parliament, where she cleaned the offices of politicians until 6am.

It was tough work. But ‘‘a job is a job’’, she says, and with two children it was better than being on a benefit. But for many workers like Sinoti, the wages are not enough. A new study reveals 7 per cent of working households – more than 50,000 homes – are living in poverty.

The report, published by the Human Rights Commission today, reveals who among us are not 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 is a woman, she is from Samoa, she is on minimum wage.

Those night-time shifts ended four years ago. Now, Sinoti works during the day, her sons are working and supportive, and her husband claims a pension.

But at the National Library, Sinoti is on minimum wage – $17.70 per hour. It is a simple equation.

Mareta Sinoti is a National Library cleaner on minimum wage. Across the road, at the Beehive, cleaners get the living wage.

Take-home wages might be $500 a week. Rent is $300. A 10-trip train ticket from Porirua to the city is $51. ‘‘Then you figure it out, how much you pay your power, your food, your phone ... And then, there is no money left.’’

Frustratingly, the cleaners now at the Beehive earn the living wage – $21.15. It is not fair, she says. They have the same job and, really, the same boss.

Working but poor

The report makes clear the inequity felt by New Zealand’s poorest workers. The in-work poor report uses a poverty definition slightly higher than the target set by the Government’s Child Poverty Reduction Act: a household earning less than 60 per cent of the median income, before housing costs are subtracted. So, take median income – which in June 2019 was $1019 per week – draw at line at the 60 per cent mark (roughly $600 per week).

The data of each household is passed through a formula, so the

income of a small family is comparable with 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 and self-employed households were subtracted. A working household was defined as having one adult working for any wages or salary, for seven months in a year.

The result: Four in five households are working, and 7 per cent of these are below the poverty line. Only 1 per cent of these households are below the line for a full year. And one in 10 children in working households are living below the poverty threshold.

AUT professor of economics Gail Pacheco, part of the team who produced the report, says the inwork poverty rate can double for specific population groups.

More than 12 per cent of singleparent households qualify as working and impoverished.

Families of Pacific and Asian ethnicity experienced above average rates of working poverty, at

9.5 and 9.4 per cent, compared with Pa¯ keha¯ families at 5.9 per cent.

‘‘Couples with children, if they have only one adult working, their in-work poverty right now is about

13 per cent, and this falls to about

2 per cent if both the adults are working,’’ Pacheco says.

The overall in-work poverty rate had not changed between 2007 and

2017, the report notes.

While the census data used is now six years old (the more recent and compromised Census 2018 data was not available), other data means an educated guess can be made about how low-paid working families have fared since.

The minimum wage has been boosted, and unemployment is low at 4.2 per cent. But the cost of living keeps rising.

Hardship grants are escalating – a $167 million bill in the past four months. Food banks are reporting high demand.

A question of fairness

Equal Employment Opportunities Commissioner Dr Saunoamaali’i Karanina Sumeo says the study shows that in New Zealand work won’t save you from poverty – and she says it won’t have improved since 2013.

She is focused on discrimination, and she says the report proves what they suspected and fits with other statistics. There is an increasingly discussed gender and ethnic pay gap. Ma¯ ori and Pacific workers feature heavily in the 295,000 ‘‘under-utilised’’ workers counted by Statistics NZ – meaning they are not getting the work they want.

Sumeo is not optimistic wage increases will have sizably changed the fortunes of low-income workers. But she is encouraged by conversations she is having with Kiwi businesses like SkyCity, The Warehouse, BNZ, and insurance firm AIA, about pay equity.

‘‘Attitudes are shifting.’’

No fast fix

Workplace Relations Minister Iain Lees-Galloway says the report showed why Fair Pay Agreements, which would compel unions and employer associations to negotiate industry-wide collective agreements, were needed.

But unions say the Government has delayed the process, and with a new round of consultation due to wrap up next year it appears the agreements won’t be in place by the 2020 election.

Economic Development Minister Phil Twyford says work has started on extending the living wage. Sinoti was at union meetings with Government ministers.

‘‘Too many times we are coming to Parliament asking about living wage,’’ she says.