Poverty measure ... doesn't make sense to me

[Oakie]

Watching TV news this morning and some guy was talking about poverty. He said the measure was defined in New Zealand as the households that make less than 60 per cent of the median disposable income. Fine. I did fail school cert maths but one thing I was good at was statistics.. I started thinking.

The median is the middle point in a series. The point that separates the top half from the bottom half.

Now I can understand making a dollar value the 'poverty line' but I don't understand making it a percentage of the median. If the goal is to eradicate 'poverty', then saying 60% less than the median is useless because no matter what you do, there will always be people 60% less than the median. If you increase the dollars those people at the bottom get, then yes, they get more dollars but then the median goes up so there are still the same number of people 60% below the median.

Am I wrong? I did say I failed school cert maths (41 years ago).

[johcar]

Watching TV news this morning and some guy was talking about poverty. He said the measure was defined in New Zealand as the households that make less than 60 per cent of the median disposable income. Fine. I did fail school cert maths but one thing I was good at was statistics.. I started thinking.

The median is the middle point in a series. The point that separates the top half from the bottom half.

Now I can understand making a dollar value the 'poverty line' but I don't understand making it a percentage of the median. If the goal is to eradicate 'poverty', then saying 60% less than the median is useless because no matter what you do, there will always be people 60% less than the median. If you increase the dollars those people at the bottom get, then yes, they get more dollars but then the median goes up so there are still the same number of people 60% below the median.

Am I wrong? I did say I failed school cert maths (41 years ago).

I think your 41 year old fail of School C maths is better than an achieved in NCEA maths and kapa haka put together.

You are spot on. The measurement of poverty by bleeding heart liberals using this formula means we will always be on a hiding to nothing.

There is no poverty in NZ - anyone who is been to Asia, Africa, South America or the middle east knows what poverty looks like.

What we have here is a failure of parenting: wrong choices made for their priorities...

Throwing money at these people will never achieve anything

[Graystone]

Watching TV news this morning and some guy was talking about poverty. He said the measure was defined in New Zealand as the households that make less than 60 per cent of the median disposable income. Fine. I did fail school cert maths but one thing I was good at was statistics.. I started thinking.

The median is the middle point in a series. The point that separates the top half from the bottom half.

Now I can understand making a dollar value the 'poverty line' but I don't understand making it a percentage of the median. If the goal is to eradicate 'poverty', then saying 60% less than the median is useless because no matter what you do, there will always be people 60% less than the median. If you increase the dollars those people at the bottom get, then yes, they get more dollars but then the median goes up so there are still the same number of people 60% below the median.

Am I wrong? I did say I failed school cert maths (41 years ago).

Yes your mathematical interpretation is flawed, that measure of poverty is a measure of inequity, were we all earning the exact same amount, nobody would be earning less than 99% of the median.

Your conclusion that it is a shit measure is spot on, any poverty measure based on income or spend is going to be flawed because it takes into account wants, rather than just the needs. Trickle down capitalism with a dollop of basic democratic social policy seems to result in a pretty solid downwards trend for absolute poverty. Perhaps that is why socialist parties feel the need to use relative measures to define it.

[HEsch]

Amount needed to live on is also relative to what you need to spend it on - what I "need" (or want) to spend on my lonesome single self with no dependants, is going to differ from someone with a spouse and various offspring.

I don't question that there are many people who are not well off, and do not have money floating around. Just that the amount needed to live comfortably, and not worry about where the next meal or rent cheque is coming from, does often correspond with one's choices in life.

[FJRider]

The median is the middle point in a series. The point that separates the top half from the bottom half.

The median is Average. Average is not (necessarily) the middle

Am I wrong? I did say I failed school cert maths (41 years ago).

Yep ... when I sat school cert maths ... the average mark in my class was 38%. 38 is not the "middle" between the highest and lowest possible score.

The point that separates the top half, from the bottom half of the earners ... is that the top half have the ability, inclination and/or position ... (and desire) to be in the top earners.

Many of those "in poverty" might think it beneath them to sweep streets ... or ANY other shit paying unskilled work.

[Jeeper]

The problem with a relative poverty (or rather inequality) ratio is that as the disposable income of the population shrinks, it would improve. In words, if all became poorer there would be less people in poverty!

Another problem with a measure like this is that it ignores assets or any savings/wealth such a person may have acquired. Its possible, for argument sake, that a frugle person who has limited income yet manages to save substantial amount over the years would still be considered in poverty if below the 60% threshold.

This measure is actually what OECD uses, and so do most European countries for comparative purposes.

[HEsch]

Another problem with a measure like this is that it ignores assets or any savings/wealth such a person may have acquired. Its possible, for argument sake, that a frugle person who has limited income yet manages to save substantial amount over the years would still be considered in poverty if below the 60% threshold.

Earning power vs savings ability - crucial.

[JimO]

while i feel that there is genuine poverty in NZ i also feel 99.9% is bad parenting

[Jeeper]

Earning power vs savings ability - crucial.

Agree, in economics its classed as marginal propensity to save. Or the flip of marginal propensity to consume, which explains the increase in personal consumer spending (consumption) occuring with increase in disposable income. In simple terms, some people tend to save or spend more than others but generally as our incomes increase, so does oir spending. Often luxury goods become necessities.


PS: I studied economics. Hence, this is closer to my heart.

[Jeeper]

I thought anyone living in poverty were those seen in photos as skinny as a stick living in Africa and begging (as an example). With WINZ in NZ we have the best fed beggars in the world I feel.

I don't think its very civilized or cultured to call people in need beggars. Not everyone at WINZ is there to abuse the system. Sure there are some examples of bad parenting, abuse of system, or even deceitful behavior. But generalizing like you have shows lack of intellect. There are definitely people who need our support (but often they are too humble to ask for it).

[Luckylegs]

while i feel that there is genuine poverty in NZ i also feel 99.9% is bad parenting

And growing up with bad parenting can we expect people to be better parents or is it more likely they might continue the cycle.

My point being can we simply dismiss the issues with throw away lines like yours or does some thing need to change?

[Jeeper]

The median is Average.

Mathematically, median and average are not the same and not necessarily always equal, particularly where the data has outliers.

[Jeeper]

And growing up with bad parenting can we expect people to be better parents or is it more likely they might continue the cycle.

My point being can we simply dismiss the issues with throw away lines like yours or does some thing need to change?

Neither throw away lines, nor throwing money at it will fix the problem. It has to be a behavioral shift across-the-board. Fix the root cause to fix the problem. There have to be incentives for someone to change their behavior. Education, self-esteem and removal of stigma attached to failures in ventures willo a long way to start.

[FJRider]

I thought anyone living in poverty were those seen in photos as skinny as a stick living in Africa and begging (as an example). With WINZ in NZ we have the best fed beggars in the world I feel.

You obviously lead a sheltered life. Those on a benefit are luckier than some. Only those on a benefit think they are in poverty.

Most in poverty are those that chose to live as such. Their (poor) life choices led them to be as they are.

To get a job ... first you must WANT to work. The fact that most wont do work they don't like to do ... can present difficulties for them in finding work.

Easier to breed a dozen kids (don't get excited Akzle) with the taxpayers picking up the tab for their welfare ... than actually getting a job.



Get your head out of your ass and look around.

[Luckylegs]

I dont mean all WINZ clients are beggars but the existance of WINZ does mean those that beg on top of their WINZ payments are very well fed compared to countries where there is no WINZ.

Well duh! - i think that is your point, but curiously im still left wondering what is your point.

Are you suggesting they should be greatful for their lot in life