Wednesday, April 10, 2013

CPAG attack John Key and Paula Bennett for promoting myths about sole parents and the DPB

Late last month the Child Poverty Action Group launched a report written by Virginia Dale, "Myths and Facts: Sole Parents and the DPB"  

Unpicking the myths ; "This  backgrounder  uses  examples  from  politicians  and  commentators  and  contrasts  their statements with factual data that is readily available from Government and other websites and publications. "

The 'myths' quoted are from John Key, Paula Bennett, Don Brash, myself and unnamed sources.

Let's work through it and check their 'facts'.

 Of these sole parents [all with dependent children], nearly 36% were in full time paid work, and 19% in part time paid work. These employment rates for sole parents are better than the UK and Australia, although just below the  OECD  average.

She has used OECD data from here.

NZ's rate is only "better" than the UK and Australia because the data is more recent (2008 versus 2005 and 2004 respectively.)

More recent OECD data (see slide 5 here) shows the UK and Australia with higher sole parent employment rates by 2009.

The majority (81.4%) of sole parents on the DPB are aged between 25 and 64 with 1.7% of individuals  making  up  the  18-19  age  brackets.
The percentage has consistently been between 2 and 3 but dropped to 1.7 percent after a few hundred teenage parents were moved onto the recently created Young Parent Payment. The writer used December 2012 statistics. If she'd contrasted December 2011 she would have found the percentage was 2.8 and wondered (perhaps) why it had suddenly dropped by 39 percent.

18 and 19 year-olds have never made up a large percent of the total DPB numbers because they represent just a narrow age-band. Looked at differently, the higher percentage that 18-19 year-olds constitute, the better. That would mean they are leaving the DPB sooner. She has also ignored 16 and 17 year-old single parents.

 Myth 1: Breeding for a business
[Labour’s policy has led to] the situation where people have been, for want of a better term, breeding for a business. John Key, 2002
There  is  no  evidence  that  anyone  ‘breeds  for  a  business’  or  that imposing  work  obligations  change  fertility  outcomes.  Relationship  breakdown  is  a  major cause of women becoming sole parents. At the 2006 Census, two thirds of sole parents had  been  previously  married  or  in  a  civil  union.
This claim is astonishing. I checked her source for this and found it came from a Waikato University Facts sheet "Sole Parents, Teenage Fertility and Ex-nuptial Fertility."

Of the two thirds referred to above

o   8 per cent were still married (median age 43 years)
o   20 per cent were separated (median age 43 years)
o   24 per cent were divorced (median age 46 years)
o   13 per cent were widowed (median age 63 years)

So if at 2006 your elderly Mum was alive but your Dad has passed away, she'll be in this group of 'sole parents'? Look at the median ages. These are not generally sole parents with young dependent children and as such are totally unrelated to the DPB. I'm utterly flabbergasted by this University-produced fact sheet (and explored it further here). What are elderly widows and middle-aged divorcees doing on a fact sheet related to sole parents, teenage fertility and ex-nuptial fertility? Unbelievable.

The median age of those on the DPB is 32. The median age of sole mothers who had never married or been in a civil union is 33. There's correlation.
 When  a  spouse  dies,  or  the  relationship becomes violent, access to the DPB contributes to the protection and well-being of the child.

Small point but when a spouse dies the widow has access to the widow's benefit - not the DPB (although that will soon change.)

...employment levels among sole parents move with the overall state of the economy. In the mid-2000s when there were increasing general levels of employment, there was a marked increase in the employment rate of sole parents. The numbers on the DPB fell. This ‘gain’ disappeared when the onset of the recession in 2008 led to rising unemployment.

Yes, but when NZ had the lowest unemployment rate in the developed world, December 2007, there were still 98,154 people drawing the DPB. Most, but not all, were single parents.

Now the writer cites one of my blog posts:

Myth 4: DPB pays more than the average female worker’s wage
DPB pays more than average female worker’s income...choosing motherhood over work is entirely economically rational. Lindsay Mitchell, Welfare Commentator, 2010
Her link from the paper to my blog does not work because the final 'l' has been omitted. Intentional? But here is the post she refers to and I stand by. It shows that the average weekly earnings for a female in 2010 were $519  whereas someone living on the DPB in Auckland with two children was receiving $580.

Lindsay Mitchell appears to be adding on things like the accommodation supplement and Working for Families: The net basic rate for the DPB of $293.58 (2012) with an extra $92 for the first child and $65 for the second from Working for Families. The accommodation supplement will only meet part of her housing costs, now much greater as she has children. 
 I used the official MSD figure of $580 which obviously includes all top-ups to the basic rate.
 This myth directly contradicts the myth that ‘work is the way out of poverty’.
No it doesn't. Firstly jobs change. People join an organisation and move up or work more hours. But perhaps even more importantly, work, and associated environments, are often where people meet new partners. Forming relationships and sharing costs is another way out of poverty.

Myth 5: Welfare traps people in poverty
[The Welfare System] de-motivates and traps people who are perfectly capable of being independent. Lindsay Mitchell, Welfare Commentator (2010).
There is no evidence for the claim that welfare demotivates those who receive it. It is equally likely that the experience of being on welfare is sufficiently awful to provide an incentive to move into work at the earliest opportunity. The problem is availability of good secure full-time work .The Beneficiary numbers move in line with the general state of the economy, that is, when  employment  is  available,  beneficiary  numbers  decrease.  This  would  not  happen  if people were ‘trapped’ on welfare.
As mentioned above the numbers on the DPB did not drop substantially when the economy improved. Unemployment benefit numbers did but that's not what this paper is about. The writer doesn't disprove that those who remained on welfare during the economic boom weren't trapped. In any case she goes on to talk about the high effective marginal tax rates associated with trying to leave the DPB which I agree are a problem.

While the total numbers in receipt of the DPB may remain similar for long periods, there is a high turnover: 25% of those currently on the benefit have received DPB for under a year, 66% have been on it for less than four years, and only 10% have been on it for ten years.
These percentages relate only to 'current' spell. Many leave welfare and return and the clock starts afresh. When MSD researchers looked at sole parents on welfare at the end of 2005

·          just over half had spent at least 80% of the history period observed (the previous 10 years in most cases) supported by main benefits. I tire of this wilful misrepresentation of dependency duration.

Myth 11: DPB separates children from their fathers
The DPB has clearly contributed to many children growing up without fathers, often without even knowing who their father is. Past Leader of Act Party Don Brash, 2005.

Why describe Don Brash as past leader of the Act Party when the quote is taken from his time as leader of the National Party? Political bias is why.

Look I'm not even going to tackle this one. It is absurd to deny that the DPB hasn't affected the rate of single parenthood and subsequently, the number of children who grow up without a father in situ or possibly unknown to the child. There is ample international evidence to the effect that the level of welfare payment correlates with the rate of single parenthood. If fathers aren't substantively financially supporting their child or their child's mother  it's a fair assumption that some, if not many, aren't around at all.

I note that CPAG has not pushed this paper hard. It only came to my attention when I visited the Auckland Action Against Poverty site this morning to see what they are saying about the welfare reforms legislated last night.

If I am guilty of promoting myths, the CPAG is even more so.


Psycho Milt said...

This came up The Daily Blog, with endorsement of the alleged myth-busting. I left a comment, won't repeat it here.

Lindsay Mitchell said...

Thanks PM. I've left a question/comment asking who QOT thinks is paying me and a link to this post. But it's in moderation.

Anonymous said...

Time to do what Thatcher would do: a real "social experiment!"

Stop the DPB for say 5 years. Measure the number of bludgers-with-kids before and afterwards.

We all know what the result would be: absolute unconditional support for never restarting the DPB and for eliminating all other benefits, including super.

JC said...

There's likely a fascinating story to tell on Maori fertility. According to my Yearbook 2000 Maori women had 6 kids per female in 1960 but when the Birth Control pill arrived that plummeted to just over 2 per female by 1990 before a steady recovery to the present level. Even the arrival of the DPB in 1973 didn't slow the descent.

So why did these women take such drastic control of their fertility back then, and why did it increase from 1990? The story is almost certainly rooted in changes in work, social changes, a precipitous fall in religious observation and marriage and Govt policies.


Anonymous said...

Excellent fisking, Lindsay!