The OECD’s latest report says
“The biggest factor for the impact of inequality on growth is the gap between lower income households and the rest of the population. The negative effect is not just for the poorest income decile but all of those in the bottom four deciles of the income distribution. These findings imply that policy must not (just) be about tackling poverty, it also needs to be about addressing lower incomes more generally.”
Let’s hope at least some MPs, our elected representatives, take the findings of the OECD report seriously. ‘Trickle down’ has not happened, and the top elite have captured all the benefits of any economic upturn and appropriated massive amounts of unearned income to themselves. Forget about low growth, mega millions at the top that the rich don’t know how to spend and utter misery at the bottom is a recipe for societal disaster.
The OECD vindicates what CPAG has been saying for the last 20 years. The saddest part is that children have been the victims of the failed trickle down policies.
The same ideology that underpins trickle down theory has decreed that in order for parents are on benefits to have an incentive to get work, their children’s lives should be made miserable. The fact that paid work may not be there doesn’t count because the ideology denies that is ever impossible to find work in a market economy. The unpaid work of parenting, especially of young children, as usual, is completely invisible and unvalued.
I know it is like a cracked record but it needs to be shouted out loud. Since 1996 family policy has increasingly emphasised that access to tax-payer support for low income children is conditional on parents working in the market economy. This policy approach was intensified with Working for Families under Labour, when 230,000 children were excluded from the full package of support because their parents did not fulfil the hours of paid work required.
As a result, many billions of dollars (more than a cumulative $6 billion) has been denied to the very poorest families. Along with failed housing policy that has delivered immense wealth to speculators, poorly designed family incomes policy has ensured there is a large underclass of families dependent on foodbanks and private charity to survive.
The OECD says that it is not appropriate now to concentrate on just the lowest 10%, but that policies for the bottom 40% have to be more generous. Bill English needs to pay attention. His government’s belated interest in child poverty concentrates on finding and fixing only the highly vulnerable and worst off children, while ignoring preventive measures of adequate incomes for all. Here, surely, is Labour’s chance to shine and make up for buying into failed ideology when it introduced Working for Families.
Families have not gotten lazier and so need more sticks and carrots as policy directions imply. The best way for government to start the process of active redistribution is to immediately extend the full Working for Families package to all low income families and to properly adjust these payments for wage growth in the economy. Then urgent attention must be paid to housing and education policy as vehicles of redistribution. Higher tax from those who already have more than enough is a very, very small price to pay for a better and happier society.