50,000 families ‘working poor’
Mareta Sinoti spent years of her life working through the night, vacuuming, spraying, and scrubbing the offices which keep New Zealand running.
A working day began at 6pm at the Wellington High Court. It was then a short midnight walk to her next job, at Parliament, where she cleaned the offices of politicians – even the prime minister’s a few times – until 6am.
It was tough work. But ‘‘a job is a job’’, she says, and with two children to clothe and feed, it’s better than being on a benefit.
But for many workers like Sinoti, the wages aren’t 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 aren’t earning enough to live, and how many are falling below the poverty line – even just for a month or two.
In many ways, Sinoti, 47, is the type 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 during the day, her sons are working and supportive, and her husband’s on a pension. But at the National Library, she’s on the minimum wage – $17.70. It’s a simple equation. Take-home wages might be $500 a week. Rent is $300. A 10-trip train ticket from Porirua to the city is $51.
Frustratingly, a few hundred metres across the road, the cleaners now cleaning the Beehive earn the living wage – $21.15.
It’s 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 headline figure shows 7 per cent of working households, or more than 50,000 homes, live in poverty.
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 singlemember 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.
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 couldn’t be counted. A working household was defined as having one adult working for wages or salary, seven months in a year.
Result: Four in five households are working, and 7 per cent of these below the poverty line.
Only 1 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 single-parent households qualify as working and impoverished. 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.
‘‘If you have a second worker in the household that reduces inwork your poverty rate quite substantially,’’ Pacheco says.
‘‘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.’’
The overall in-work poverty rate hadn’t change between 2007 and 2017, the report notes.
While the Census data used is now six years old (Census 2018 data wasn’t available), other data points mean an educated guess can be made about how low-paid working families have fared.
There’s been a boost in the minimum wage, and unemployment is low at 4.2 per cent. But the cost of living keeps rising. Hardship grants given out by MSD are escalating sharply – a $167 million bill in the past four months. Food banks across the country are reporting high demand, and empty shelves.
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.
‘‘The struggle is real for many of our families . . .’’