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Tuesday, September 25, 2012

Poverty is the result of inequality

Okay blog readers, brief plug first: if any of you do not watch or have not heard of Native Affairs, highly recommended viewing. Mondays 08:30pm on Maori TV. It’s a current affairs show – the best, to be honest.  This week, the main topic was poverty, specifically in relation to living conditions.  You can watch past episodes online, just click on this link:

The definition of poverty differs according to whose doing the measuring. Typically, in NZ we measure relative poverty, simply meaning that we measure according to the ‘minimum level of income deemed necessary to achieve an adequate standard of living’. We can therefore see that poverty derives from the inequality in respect of  the distribution of incomes. So while there are many people out there proffering solutions such as community gardens to feed the poor or housing projects to shelter them, within a monetary economic system, the only way of restoring equality and eliminating poverty is through the redistribution of wealth.

But what government is willing to advocate for that?

I acknowledge that there are many groups out there trying to ‘fix’ poverty or individuals wanting to ‘fix’ it. But only the government is in a position to make the changes necessary. The government must look at income distribution and tax if they have any real intent to solve poverty in NZ. (see link at the bottom of the page for an interesting blog on tax)

Let us look at the minimum wage, because it is not just beneficiaries living in poverty. The argument is that we cannot raise the minimum wage because of the adverse effect it would have on small business. Well, while we are busy protecting small businesses from going bust by increasing the minimum wage, we are also subsidising medium and large corporations who pay many of their employee’s minimum wages and punishing those who are working for crumbs. Low-income earners are entitled to claim subsidies such as accommodation supplements, working for family tax credits and food vouchers. In an attempt to blind the public to who the taxpayer is really subsidising, the government posit these social security schemes as being benefits to our low-income earners and claim this as some great deed that we as taxpayers are subsidising the incomes of low wage employee’s. Bullshit. We are subsidising businesses so that they can pay the employee less than their labour is worth so that they can make a bigger profit. Taxpayers are doing no more than topping up the wages of low income earners because the government privileges businesses over people. As a result, the government cut further spending in the social services (including health and education) because of the allocation of our taxes to subsidise businesses who cry wolf at the thought of paying a living wage to an employee for their labour. Interestingly, these business owners are usually the same people harping on about individual responsibility, welfare statism and a free market even though they are products of the same labels they use to chastise the poor.  

So my point is, while community gardens and housing projects will feed the poor and provide shelter, they do not address the inequality issue. Redistribution of wealth will help solve the inequality issue, but land ownership and an insistence on private ownership of land, will always ensure that inequality prevails. Think about it – we as human beings are always occupying a physical space. Yet, every space we occupy has some rights, interests or obligations attached to it. We cannot simply choose to opt out of society – because even if we did, someone or some entity has rights and interests in every inch of the land. So if we wanted to just go to sleep somewhere either local government would prevent us from doing so on council owned land, DOC would prevent us from doing so on conservation land, homeowners, renters and business owners would prevent us from doing so on their privately owned land. Yet we must sleep. In commodifying land, we have taken out of the commons a resource necessary for all land dwelling species to survive. Successive governments have arbitrarily determined the boundaries and the rights and interests that can be attached to land notwithstanding that land is not a manufactured good whose origin can be traced to a particular person. Additionally, land ownership has forced people to participate in a society that they were contingently born into even if that means participating to the detriment of their own well-being. 

Highly recommended read on NZ tax system as regressive not progressive: 

Also checkout:  there are some great resources on this site.