Fact 5: Getting a job doesn’t solve the poverty problem

  • Employment alone does not solve poverty and unemployment remains high.
  • Most beneficiaries want to work. International research does not support the assumption that beneficiaries lack a work ethic and are content with the beneficiary ‘life-style’
  • Obtaining work in itself does not guarantee that poverty will be alleviated. Many jobs are ‘precarious’ or insecure and don’t pay as well (or offer the same security) as a full-time, permanent job
  • There are good reasons why not all beneficiaries should get a job right now: health problems, disabilities and childcare responsibilities all present major barriers to work

Employment alone does not ‘solve’ poverty

Unemployment in New Zealand, while low in comparison to other wealthy OECD countries, remains high and is not expected to fall below 5% until 2016. Underemployment remains a significant problem with the June 2014 Household Labour Force Survey reporting a 12% increase in the number of people seeking more hours than they have currently.

Since 2005 the Working for Families financial assistance package has provided  targeted payments, mainly to middle and lower income people in paid employment, and has helped redcue hardship for many families. However, the 2013 MSD Household Incomes report (p.150) single working age adults with no children have the second highest poverty rate (30%) of all households and they receive no assistance through Working for Families.

Most beneficiaries want to work

International research does not support the assumption that beneficiaries lack a work ethic, are content with the beneficiary „life-style‟ or that their children are being groomed for a life on welfare. Auckland City Mission research with their clients shows that if a job was available they would take it immediately and many work without pay and volunteer their time.

An earlier evaluation of reforms to the DPB and Widow‟s Benefit from 1999 also indicated that sole parents tended to become DPB recipients only as a last resort. They had a high level of previous work history and were generally highly motivated to work.

Obtaining work in itself does not guarantee that poverty will be alleviated

“The important considerations in shaping the employment behaviour of beneficiaries are the availability of jobs, the adequacy and security of income, the state of the economy and the availability of childcare”. (Prof. Mike O’Brien , Workfare: Not Fair for Kids)

Many working families on low-incomes cannot make ends meet: Low-wage, dead-end jobs have the potential to exacerbate inequalities similar to joblessness. Although Working for Families provides welcome additional income to many families with children, in 2013, 39% of households in poverty were had at least one or more people in full-time work.

Analysis of benefit-to-work transitions indicate that less than a third of those re-entering the paid workforce remain continuously employed for the following two years. Many of those who re-enter the workforce do so with part-time or casual work that does not necessarily significantly boost their incomes and more than half of them need further benefit income.

Many jobs are ‘precarious’ or ‘non-standard’ and don’t pay as well, or offer the same security, of a full-time, permanent job

Work that is not permanent and full-time has become increasingly common in New Zealand. Some non-standard workers, particularly casual and/or temporary workers, may be in precarious jobs – that is, low quality work with low wages, low job security, higher health and safety risks, little or no control over workplace conditions or hours of work and limited opportunity for training and skill development.

Precarious workers, or those at risk of precariousness, are more likely to be women, young, an ethnic minority, and less skilled and -educated.

There are good reasons why not all beneficiaries should get a job right now

Not everyone can or even should seek paid employment. People who are disabled, those who are sick, the people who are caring for sick or disabled family or partners, parents caring for young children – they have good reasons not to be in the paid workforce and deserve to receive an equivalent level of support to those in paid employment.