01.03.04. Poverty and inequality | New Zealand
01.03.04. Poverty and inequality | New Zealand
13 Sep 2022
The Gini Coefficient is a measure of income inequality, with a score of 100 indicating complete inequality (one household has all the income) and a score of 0 indicating complete equality (all households have the same income). New Zealand has a Gini index of 33, sitting in the top third of most unequal countries and higher than the OECD median of 31 (Statistics NZ, n.d.). The index increased significantly in the 1990s but has plateaued since then in the low 30s (Statistics NZ, n.d.).
The average gender pay gap in 2019 was 9.3% and, whilst lower than the 16.2% reported in 1998, has plateaued at this level since 2017 (Statistics NZ, 2019). However, this gap varies by occupation, from 7.1% for clerical/administrative workers to 16.7% for professionals.
These differences are further magnified when looking at Māori and Pacific populations, who earn between 15-26% less than Europeans (Table 14) as a population or when compared by gender (The Treasury, 2018). Whilst variables such as age, occupation, and highest qualification explain some of these differences they only account for ~40% of the variance, indicating at least some of the remaining variance may be due to discrimination (The Treasury, 2018).
Table 14: Average wage by ethnicity and gender and their ratio to the European wage (The Treasury, 2018)
|Total $||Male $||Female $||Total wage as a percentage of European wage||Male wage as a percentage of European male wage||Female wage as a percentage of European female wage|
Table 15 details the OECD wellbeing indicators for the regions in NZ. Regional disparities in health outcomes in New Zealand are the second largest among OECD countries, with Auckland ranking in the top 20% of OECD regions and Gisborne in the bottom 20%. The low performing regions in New Zealand fare better than the OECD median region in six out of the 13 well-being indicators but fall below the OECD median in life expectancy, mortality rate, unemployment rate, homicide rate, disposable income per capita, broadband access and share of labour force with at least a secondary degree (OECD, 2019; n.d.).
Table 15: OECD wellbeing indicators for NZ regions 2018.
|Region||Education||Jobs||Income||Safety||Health||Environment||Civic engagement||Accessiblity to services||Housing||Community||Life satisfaction|
|Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]||Score [0-10]|
|Bay of Plenty||2.7||8.4||3.4||9.6||7.5||10.0||8.1||5.3||7.8||9.3||8.1|
Regional inequality is also highlighted by the NZ index of deprivation (NZDep). NZDep is a scale of deprivation derived from variables in the census including income, employment, living conditions and qualifications. It is a scale from 1 (least deprived) to 10 (most deprived) for defined geographical areas of NZ (Atkinson et al., 2019). This means areas with a NZDep score of 10 are in the most deprived 10% areas of NZ. For example, Northland and the East Cape are highlighted as areas with high deprivation.
Māori and Pacific people are overrepresented in deciles with higher deprivation when compared those of NZ European and Asian ethnicities as highlighted when comparing Māori to non-Māori across deciles or NZDep2013 and the population distribution across deprivation scores by ethnicity.
Table 16 describes child poverty statistics in New Zealand in 2019 using 3 different measures (Statistics NZ, 2020). Regardless of which measure is used, Māori, and Pacific people are more affected when compared to Europeans. While 13.4% of children in NZ live in households experiencing material hardship, this differentially affects Māori (23.3%) and Pacific (28.6%) children when compared to Europeans (9.8%).
Table 16: Child poverty statistics for the year ended June 2019 (Statistics NZ, 2020)
|Percentage of children living in households with less than 50 percent of the median equivalised disposable household income before housing costs are deducted||Percentage of children living in households with less than 50 percent of the median equivalised disposable household income after housing costs are deducted (for the 2017/18 base financial year)||Percentage of children living in households that experienced material hardship|
Atkinson, J., Salmond, C., Crampton, P. (2019). NZDep2018 Index of Deprivation. Interim Research Report, December 2019. University of Otago, Wellington. Available from: https://www.otago.ac.nz/wellington/otago730394.pdf.
Ministry of Health. (2018). Ngā awe o te hauora: Socioeconomic determinants of health. Available from: https://www.health.govt.nz/our-work/populations/maori-health/tatau-kahukura-maori-health-statistics/nga-awe-o-te-hauora-socioeconomic-determinants-health/neighbourhood-deprivation.
OECD. (2019). Regions and Cities at a Glance 2018 – NEW ZEALAND. Available from: https://www.oecd.org/regional/NEW%20ZEALAND-Regions-and-Cities-2018.pdf.
OECD. (n.d.). OECD Regional Wellbeing: Auckland. Available from: https://www.oecdregionalwellbeing.org/NZ12.html.
Statistics NZ. (2019). Gender pay gap unchanged since 2017. New Zealand Government Website. Available from: https://www.stats.govt.nz/news/gender-pay-gap-unchanged-since-2017.
Statistics NZ. (2020). Child poverty statistics: Year ended June 2019. New Zealand Government Website. Available from: https://www.stats.govt.nz/information-releases/child-poverty-statistics-year-ended-june-2019.
Statistics NZ. (n.d.). Income inequality. New Zealand Government Website.
The Treasury. (2018). Statistical Analysis of Ethnic Wage Gaps in New Zealand (AP 18/03). Available from: https://treasury.govt.nz/publications/ap/ap-18-03-html#section-5.