Official briefings paint bleak picture of NZ's working poor

Official briefings paint bleak picture of NZ's working poor
Photo credit: File

Official briefings on employment and social development paint a bleak picture of New Zealand's working poor.

Aotearoa is experiencing record levels of employment and there have been two decades of a "solid increase" in household incomes. But people are being left behind.

The briefings are part of a slew of documents released to the public on Thursday. The 170 documents brief new ministers on the state of the ministry they are taking over.

The social development briefing says despite the lowest level of unemployment since 2008, wage growth has been low. That's compounded by expensive housing and unstable, short-term work.

Despite Working for Families tax credits, 40 percent of children in families experiencing financial hardship have a parent in full-time work.

The briefing also identifies a "significant" increase in the number of Special Needs Grants, putting it down to "increasing pressure of relatively high accommodation" and other household costs, as well as an increase in online applications.

Official briefings paint bleak picture of NZ's working poor
Photo credit: Briefing to the incoming Minister

"There are historically high rates of employment and the unemployment rate has fallen to 4.8 percent in the June 2017 quarter, the lowest rate since December 2008," the social development briefing reads.

"However, important areas of concern are that productivity remains well below that of comparable OECD countries, wage growth among low-paid workers has been modest, and fixed-term and temporary employment is high."

The story is the same in the employment briefing, which states wage levels are relatively low in New Zealand and nominal wage growth has remained low since the GFC. The saving grace is low inflation.

"Low rates of inflation have ensured real wage growth across the income distribution," it says. 

"Income inequality is above the OECD average, but has remained relatively flat since the mid- 1990s. 

"Nevertheless, some individuals and groups have persistently low incomes, and poorer outcomes that may persist across generations."

Underemployment is also a problem. The employment briefing says "a significant minority of people would like to work more" and the underutilisation rate has remained at a high level since the 2008 global financial crisis spike.

More work is needed to tackle persistent poverty, with the high cost of housing identified as a "major" driver of hardship for lower-income households, the social development briefing says.

Demand for state housing is increasing faster than supply. Demand increased 72 percent between September 2015 and September 2017.

Half of all renters on the Accommodation Supplement are spending more than half their income on rent.