Inequality is not confined to income and wealth; it is in our healthcare and education systems. Is Labour trying to reverse the trend?

Eighty years ago, the First Labour Government imbedded New Zealanders’ aspirations for an egalitarian society in the welfare state it created. Thirty years ago, both the Labour and National Governments began an assault on that egalitarianism and the traditional welfare state.

The most obvious step was the cutting of top tax rates both explicitly and also by switching the way that dividends were taxed. The result was a major surge in top New Zealanders’ after tax income.

The cuts had to be paid for (especially as the neoliberal policies stagnated the economy). This was done by vicious reductions to benefit levels, higher taxes on workers, and cutting back on government spending. Income inequality rose sharply.

The impact of the spending cuts was less obvious. But what they meant was that not only did those at the bottom suffer loss of spending power but they also suffered from inferior healthcare and educational services, compounding the destruction of the egalitarian society.

Healthcare

What has happened to healthcare is nicely illustrated by an international analysis of healthcare systems by the prestigious (American) Commonwealth Fund. It compares 11 countries (it always finds the US has the worst system). In 2017 it found New Zealand’s ranking was 8th (out of 11) on the equity dimension, ahead of France, Canada and the US. We were behind Britain, Netherlands, Sweden, Switzerland, Norway, Germany and Australia.

Equity in healthcare is quite a complicated issue. The measures which informed the Commonwealth Fund’s conclusion included the following: Among low income adults in the 11 countries, we came

  • 7th among those who had cost-related problems in the previous year;
  • 2nd of those who didnt have to wait six days or more to see a doctor or nurse (a good feature of our system);
  • 5th among those who had to use an emergency department;
  • 6th for patients whose doctor did not have enough time to explain things; and
  • 6th= of those who had administrative coordination problems in the past two years;

Among all adults, we came

  • 9th of those with cost-access-related problems,
  • 7th= in terms of those had skipped dental care in the past year because of cost; and
  • 10th in terms of those who had waited two months or longer for a specialist appointment.

All in all, a bit of a curate’s egg – good in parts. But the overall conclusion is that comparatively we do not do well.

The Ministry has a program looking at equity in healthcare. Most of their papers which I have seen focus on ethnic inequality and rarely pay much attention to income, class or postcode. Instructively, the funding of District Health Boards either has no component for equity or, insofar as a couple of ‘adjustors’ might be thought ‘equity’ (rural and ethnic), they make up less than 3 percent of total funding.

Education

In contrast, the schooling system claims to be directly funded to offset inequity. However only 3 percent of the total resourcing (operational and staffing) provided to our schools is allocated on the basis of disadvantage. Comparable international jurisdictions allocate around 6 percent.

(I was a bit shocked by this. We have a clumsy system of ranking schools by deciles, with numerous downsides, but the upside is only a miserable 3 percent funding across the system.)

Some international surveys suggest that the outcomes of our education system are more unequal than those of other OECD countries. The bottom is sometimes referred to the ‘brown tail’ but there are more non-browns it. (We often attribute our social failings to Maori and Pasifika people; a neat excuse which means we can ignore general systems failure. It is also unfair to them.)

Interestingly, the recently published report by the Tomorrow’s Schools Independent Taskforce. Our Schooling Futures: Stronger Together specifically addresses equity issues. It notes that international evidence shows that a policy that emphasises school competition and choice often increases ethnic and socioeconomic segregation rather than improving the access of low-income students to schools thereby serving middle or high-income students.

Yet most of the criticism of the report’s recommendations avoids equity issues, focusing on how well the advocate’s school is doing in the system. Exactly.

A recent contribution has been from the NZ Initiative’s report Tomorrow’s Schools: Data and Evidence. Unfortunately it is only note of six pages, which does not meet the standards of a research report, so I can hardly comment on the quality or veracity of the findings. 

The note observes there are performance differences among schools (it uses NCEA attainment as a measure). No one is surprised that higher-decile schools outperform lower-decile schools by a large margin (on average). However, once the NZ Initiative adjusted for the effect of family background (they dont explain how), they found that the average differences in education outcomes across school deciles disappears. The report concludes that the inequality in education outcomes evident in school league tables is not a result of large differences in school quality, but rather of large differences in family background, particularly differences in parental education.

The NZ Initiative concludes that their ‘research’ demonstrates that the current schooling system is working and should be retained. Maybe; one wants to see the research first, especially as it contradicts the international literature. (I can think of a number of ways one could do the exercise – not all of them would be valid.)

What strikes me is that the NZ Initiative barely observes that the research suggests that the main source of educational inequality (and a whole lot of life opportunities which follow on from it) is ‘family background’, whatever they mean by that. The implications for inequality are hardly explored. As far as I can infer, the NZ Initiative is so besotted with defending the competitive model of schooling it is uninterested in the wider questions of the sources of and policies for children’s opportunities,; issues central to the egalitarian society. That, I think, captures a deep attitude of the elite right; ‘who cares about social inequality providing we are doing all right’.

Indeed there is celebration of inequality when the rich display their wealth. Of course there was inequality in the egalitarian society before 1985, but it was rare for the rich to show it, to display, what Thorstein Veblen called, ‘conspicuous consumption’. After 1985 it became common to flaunt how rich you were.

Transforming New Zealand?

Jacinda Ardern promised her government would be a ‘transformative’, although she is yet to tell us what she means. Let me make a guess. To the above two cases, add the Child Poverty Reduction Act and the (thus far unsuccessful) struggle to ensure everyone has decent housing. It may be that the government’s ambition is to shift New Zealand back towards an egalitarian society, albeit a different one because of the increase in diversity.

It will not happen easily. The anti-egalitarians are well entrenched. Some will say that the ambition is to revert to the past. Others might recall the 1984 Labour campaign song ‘Up there where we belong’. Up there, Mickey Savage and Peter Fraser may be smiling benignly down on her.

Comments (22)

by Maggie Lawson on April 12, 2019
Maggie Lawson

This is an excellent article and I'm glad these inequalities are being addressed.

I'm more generous toward Labour given the mammoth task they face turning the country's eyes back toward a healthier binocular vision of where we need to go. And perhaps that's why we see so little progress over the long run.  National drags us one way and Labour, like the ever faithful retriever, has to drag us back to safety before it can even begin to build a new road.  This is especially true after this last National run where John Key was practically psychopathic in his cuts to health and using the Christchurch earthquakes to push his cost-saving school mergers.

I'm concerned but not at all surprised that the education reports seem to have glossed over the fact that our kids are not coping with the new school structure. I don't believe for a moment that their review processes are objective nor do they address the fact that there are secondary school teachers "helping" kids gain credits to boost the schools pass rates.  How do you undo that mess and not seriously disrupt the already fragile learning relationship?  Perhaps having an education system that lacks quality will kit our kids out just fine; at least they fit in with our business ethics.

I want to be hopeful.  I want to believe that we actually want an egalitarian society but for that to happen we need to stop expecting the government to make us be decent human beings. It's their job to ensure we have the resources to enact the role of responsible productive members of society; it's their job to ensure we understand what equity looks like by delivering an equitable system where everyone is valued; and it's our job to not whine about the sacrifices we'll all have to make in order to fix what's broken.

by Charlie on April 12, 2019
Charlie

Egalitarian:  believing in or based on the principle that all people are equal and deserve equal rights and opportunities.

There is nothing in our health and education systems that doesn't provide equal rights and opportunities. I doubt you can name a single example of a person of European descent getting preferential treatment over a Maori or Pacfic Islander. Just the opposite: We bend over backward to try and assist them.

The disparities of outcome (as opposed to opportunity) are entirely due to dyfunctional behaviours within those social groups.

by Maggie Lawson on April 12, 2019
Maggie Lawson

@Charlie

"The disparities of outcome (as opposed to opportunity) are entirely due to dyfunctional behaviours within those social groups."

So, you don't think different ethnicities get treated differently or that there's no racism in our schools, no preferential postcoding of previous governments?

I know for a fact that there is but I'm also keen to hear why you think otherwise.

It's also worth noting that this article focused on disparities of outcome for economic groups for which there's plenty of data that proves higher socioeconomic groups get better quality education as well has having less barriers to learning.

 

by Gavan O'Farrell on April 12, 2019
Gavan O'Farrell

The short note on findings reinforces a general concern I have about the use of statistics and evidence.  Too often, a govt just does what it is ideologically inclined to do and airs the evidence only to the extent that it is supportive, or at least not contrary.  It is very important, on all topics, that we know the lie of the land and state it plainly before making decisions.  Evidence is not garnish.

I agree with Charlie that pursuing equity of outcome is often based on a misunderstanding (often ideologically driven) of what creates the inequity.  And I agree that equal opportunity is where our focus should be.  It may be that, ideology aside, some people just made the mistake of assuming that equal opportunity would naturally result in equal outcomes (an expectation based on a simplistic view of circumstances) and then illogically inferred that continued unequal outcomes proves that equal opportunity isn't really there even though it's required to be by law and policy.

"Dysfunctional behaviours" might be a factor.  So could many other things, including systemic prejudice.  We seem more comfortable speaking of systemic prejudice than dysfunctional behaviours, but we shouldn't bother with attitudes about these factors until we get enough evidence to discuss them usefully.

I haven't read the expression "curate's egg" in quite a while.

by KJT on April 12, 2019
KJT

Anyone who thinks we are still a meritocracy, with equality of opportunity, if we ever really were, are severly deluded.

It suits those who benefit from the current situation, to keep the delusion going.

Otherwise they will have to forgo some of their unearned, and unjustified, wealth.

However a return towards equality of opportunity, makes for a much more healthy and functional society, for all of us.

It requires a more equal distribution of wealth, educational opportunities, services and resources. As we have seen with CGT, the opposition from the over privileged will be fierce, unprincipled and unrelenting.

by Pat on April 12, 2019
Pat

Two phrases that stand out.."The bottom is sometimes referred to the ‘brown tail’ but there are more non-browns it. (We often attribute our social failings to Maori and Pasifika people; a neat excuse which means we can ignore general systems failure. It is also unfair to them.)"  and "Indeed there is celebration of inequality when the rich display their wealth. Of course there was inequality in the egalitarian society before 1985, but it was rare for the rich to show it, to display, what Thorstein Veblen called, ‘conspicuous consumption’. After 1985 it became common to flaunt how rich you were."

I have stalked you and discovered you are approaching 2 decades my senior but what you describe is my youth...I grew up in this transitional period and consequently the contrasts are stark to me. Yes we had inequality, though much less pronounced, and importantly demonstrated and consequently the bellief that jack was as good as his master was real and acted upon, by all parties.

Perhaps it was a consequence of the relatively small and insular society we were then, if that was the case (and in the round I suspect it largely was) then it can only be a point against 'big is better'

by Charlie on April 15, 2019
Charlie

Maggie Lawson. Sure rich people may get the advantage of private education. That's one of the reasons their parents worked to accumulate wealth. But how is that a problem? These kids will probably get jobs in the professions, pay more than their fair share of tax and are highly unlikely to commit crimes. They are not part of the problem, so ignore them.

The left-leaning Brookings Insitute in the USA has found that teens in the underclass only need to do three things pretty much guarantee their passport into the middle class. These three things are:

1. Graduating from high school. ( I suppose that's the equivalent of NCEA here)

2. Waiting to get married until after 21 and do not have children till after being married.

3. Having a full-time job.

At the moment there are so many job opportunities. We are crying out for reliable workers. Anyone who is capable of getting out of bed in the morning can have a job. Better still, get into an apprenticeship and learn while you work. I see better earning opportunities in the trades than many who went through university and got a soft degree.

So yes we are still an egalitarian society but, just as it always was, it requires the individual to make some pretty basic good decisions in order to take advantage of the wonderful opportunities our economy presents.

 

 

 

by Gavan O'Farrell on April 15, 2019
Gavan O'Farrell

@Charlie, I agree that these 3  steps are game-makers and that they are, generally speaking, available to everyone.

"Generally speaking" is a lot, and is a strong response to a lot of the heroic victim talk that is so pervasive at the moment.  On the other hand, finishing school is not something a kid can do without encouragement from their family.  Some families whose kids don't finish school may be chronically irresponsible.  Others may be so poor that they need the kid to bring in an income asap. 

If poverty is sometimes this dire, then the equal opportunity at the school end may not always be accessible.  I don't know enough about this to suggest a strategy.

 

 

by Eric Crampton on April 15, 2019
Eric Crampton

Hi Brian.

We brought forward this short report out of a bigger project because the policy cycle required it. It's been a year-long, and counting, project in the StatsNZ data lab. Our intention had been to put up first the big report with all the method, then shorter reports on policy issues out of it as they came up. 

And then a government report was released recommending a complete overhaul of the school system on the basis of disparities in outcomes across deciles. We knew that those differences largely went away when the effect of things like parents' education, parents' income, and a pile of other family background effects were separated out. So we brought forward a short report on this topic. I don't particularly care whether the government goes for the big hub system or not, but the justification for the change was simply wrong. Differences across deciles, on average, aren't due to management structure, they're really about differences among families. There are strongly and weakly performing schools still, but they're spread across deciles. 

You suggest that we ignore underlying inequalities. You are correct that we did not put up a big table of all the family-level correlates of stronger and weaker NCEA performance. The simple reason for it is that those were control variables - they weren't the object of the study. We ran a giant OLS specification, student-level data, where NCEA outcomes were on the left hand side, every secondary school showed up as an indicator variable, and a pile of family and student background characteristics were included as control variables. The purpose of the study wasn't to precisely estimate the individual effects of each of those control variables but rather to mop up the variation in outcomes attributable to the set of them so we'd have a better picture of what variability in school performance looks like after having separated out those other effects. 

We'll want to do some more sensitivity checking on the control variables before putting the results on them into a table for the main report. Since control variables include things like parents' education, parents' income, family structure (divorced? Single parent?), ethnicity, benefit status, CYF notifications, parents' police records and imprisonment - you can imagine what nonsense would obtain were those put up prematurely.

And even once we're sufficiently confident in the coefficients to include them, it isn't like any of them are causal. They're just correlations. We find that parents' education matters a lot in explaining variability in student outcomes, but that hardly means that putting new parents in courses to get them degrees before their kids hit school would help anything. Within the correlations we've got, when parents' education is accounted for, student performance is not increasing in parental income. But we didn't want to put much up about it because it would need more work - it wasn't the object of the analysis. 

Joel's getting our code up in the wiki at the data lab. It isn't there yet - there are processes that have to be gone through. If you're cleared for IDI work in those merged datasets, please feel free to check it up in there - otherwise it'll have to wait for the more thorough report. 

As for addressing inequalities - some kids are stuck in schools that do a terrible job; other kids are in fantastic schools that are labelled as terrible because the schools have to fight against enormous difficulties that the kids bring with them to school. Our method lets us find the stars from which the Ministry could learn better practice, and seek to spread it to other schools that need the help. And it could help parents recognise that the school next door may be the best one around - if that kind of data could ever be released. 

by Kat on April 15, 2019
Kat

Trying to mix the positive inclusive values of an egalitarian society with neo liberalism is similar to mixing oil and water. One good example is the oily watery mix with the public health system and the insurance industry.

by Charlie on April 16, 2019
Charlie

Gavin & Eric Great responses both!

In summary:

1. There's nothing much wrong with the education system outside of normal variablity: Nothing systemic that holds down any particular group. Claims of racism are essentially false.

2. The underlying problem is the inability of some parents to raise children either because of their own personal limitations or that of their environment. This correlates with the usual factors: Solo motherhood, welfare recipient, illiteracy etc.

3. Given these bad circumstances, there's a only limited amount the education system can do to enable a child to recover from it.

4. From this flows most of our societal problems: Child abuse, general criminality, welfare dependency etc.

So a productive discussion would be to consider options for addressing the core issue rather than applying bandaids downstream.

 

by Eric Crampton on April 16, 2019
Eric Crampton

Thanks Charlie,

The object of our study was performance differences across schools and how much of that was due to things that schools might be able to affect. All of the controls around things like income, parents' education, and ethnicity and the like were all in there to mop up that variation. I would very strongly caution against drawing policy implications about interventions targeting those kinds of background characteristics at this point. We did not release the coefficients on those yet because, as they were not the object of the study, they need further testing to check that they're correct. Further, suppose that the data showed differences by ethnicity remained even after separating out the effects of parental income, parental education, parents' benefit status (and dozens of other controls). That doesn't say anything about the causes of those differences by ethnicity or what might help improve outcomes. 

But what further work *can* do is identify schools that are able to provide better outcomes than other schools for kids with characteristics that predict poorer outcomes. That would then let the Ministry decide to go and figure out what those schools and communities have managed to do differently from others. And perhaps then share better practice. 

Or, further work could try to look at the effects of things like benefit changes. Benefit rates did see a nontrivial increase during the last government - the first increase above inflation for some time. Did that have any effect on the next year's outcomes for kids in those households? Auckland has had occasional changes around the accommodation supplement that could affect households' after-housing-cost budgets - at least until the next rent increase. Do those have any effects? 

All of this could lead to better evaluation of the effects of policy. We all have our own preconceptions about what kinds of policies might do good. The data on outcomes should be the ultimate arbiter of those things. And note too that we can broaden the range of outcomes substantially - we just haven't had time yet. It hardly has to end with NCEA. We can look at stuff like NEET status 1, 2, 3, 4, or more years after graduation (not in employment, education or training status). There could be schools that have put less effort into their NCEA performance and more into preparing kids for later life. That kind of stuff then could start showing up in those later life outcomes.

I wish we had a dozen Joels in the lab testing all this stuff. We just have one. 

by Eric Crampton on April 16, 2019
Eric Crampton

Thanks Charlie,

The object of our study was performance differences across schools and how much of that was due to things that schools might be able to affect. All of the controls around things like income, parents' education, and ethnicity and the like were all in there to mop up that variation. I would very strongly caution against drawing policy implications about interventions targeting those kinds of background characteristics at this point. We did not release the coefficients on those yet because, as they were not the object of the study, they need further testing to check that they're correct. Further, suppose that the data showed differences by ethnicity remained even after separating out the effects of parental income, parental education, parents' benefit status (and dozens of other controls). That doesn't say anything about the causes of those differences by ethnicity or what might help improve outcomes. 

But what further work *can* do is identify schools that are able to provide better outcomes than other schools for kids with characteristics that predict poorer outcomes. That would then let the Ministry decide to go and figure out what those schools and communities have managed to do differently from others. And perhaps then share better practice. 

Or, further work could try to look at the effects of things like benefit changes. Benefit rates did see a nontrivial increase during the last government - the first increase above inflation for some time. Did that have any effect on the next year's outcomes for kids in those households? Auckland has had occasional changes around the accommodation supplement that could affect households' after-housing-cost budgets - at least until the next rent increase. Do those have any effects? 

All of this could lead to better evaluation of the effects of policy. We all have our own preconceptions about what kinds of policies might do good. The data on outcomes should be the ultimate arbiter of those things. And note too that we can broaden the range of outcomes substantially - we just haven't had time yet. It hardly has to end with NCEA. We can look at stuff like NEET status 1, 2, 3, 4, or more years after graduation (not in employment, education or training status). There could be schools that have put less effort into their NCEA performance and more into preparing kids for later life. That kind of stuff then could start showing up in those later life outcomes.

I wish we had a dozen Joels in the lab testing all this stuff. We just have one. 

by Charlie on April 17, 2019
Charlie

Eric:

" We all have our own preconceptions about what kinds of policies might do good. The data on outcomes should be the ultimate arbiter of those things"

Absolutely! Ideology is a bad place to start

by Brian Easton on April 18, 2019
Brian Easton

I guess, Charlie, you know the principle that aside from possibly this one, all short statements about ‘egalitarian’ are misleading. It particularly applies to dictionary definitions.

I warned that ‘equity in healthcare is quite a complicated issue’. The Commonwealth Fund’s concern with equity appears to be about whether those who are sick have ready access to medical care.

You have chosen to be concerned with access to healthcare depending on socioeconomic status. That is a different notion. You cannot possibly conclude that there is equality of access as far as the NZ healthcare system is concerned, since some are able to purchase access in the private part of the system if their access gets blocked in the public part; others cannot. (At a very low level, we know that some people do not take up the pharmaceuticals prescribed to them by a GP because they cannot afford the prescription charge.)

Generally the public healthcare system tries to treat all people the same. Even so, access to some treatments depends upon postcode. There are various reasons for this, but it reminds us that there are regional variations.

There is also a worry that Maori have higher mortality from cancer. We think it is not because they are treated differently by the public health system, but because they access it later and so the cancer has progressed further. We don’t know why but the same probably applies to other marginal groups in the community, including poor Pakeha.

As I said, equity in healthcare is quite a complicated issue.

I’ll return to the NZ Initiative material on the education system when the have published a scholarly report.

by Charlie on April 21, 2019
Charlie

Brian:

There is also a worry that Maori have higher mortality from cancer. We think it is not because they are treated differently by the public health system, but because they access it later and so the cancer has progressed further. We don’t know why but the same probably applies to other marginal groups in the community, including poor Pakeha.

If you're unfortunate enough to spend some time in a public hospital (I do for professional reasons) one of the things you'll notice are patients in dressing gowns smoking outside the main entrance, of which most appear to be of Maori extraction.

Go check it out for yourself. 

by Brian Easton on April 22, 2019
Brian Easton

Yesw, we know that smoking rates are higher for Maori, Charlie. Everyone knows that, so that, of course, the result I reported is adjusted for their higher smoking rate. 

by Charlie on April 22, 2019
Charlie

Brian, smoking is just an indicator for a degree of direspect for ones own body. Along with smoking there will be a raft of similar self abuse. Poor diet, excess alcohol consumption, drugs & violence.

by Brian Easton on April 23, 2019
Brian Easton

Absoutely, Charlie. But you have missed the point. Maori have a higher mortality because they arrive in the system with their cancer in a more advanced stage. Recall this column was (in part) about how our health system works,. (People have alll sorts of theories why they arrive late, but there is little systematic evidence;)  

by Jason Brown on April 29, 2019
Jason Brown

" Have we abandoned the egalitarian society? "

No direct answer to the headline question, but from the article I gather the answer from the author's perspective is yes.

In support of that, we might note that the number 1 television programme for decades was called Fair Go. Now it's not even in the top 10. 

. . .

by Brian Easton on May 07, 2019
Brian Easton

Apologies, Jason, my profession is teacher not preacher, that is I try to give you the tools to understand a problem better, rather than tell you THE TRUTH.

But yes, this teacher's conclusion about what has happened to our eglatarianism is 'yes' with some caveats I will be elaboarating in a paper iat the end of June. 

by Richard Keller on May 15, 2019
Richard Keller

Hi Brian,

Good to look at policy and results on the subject of inequality.   But looking at the larger cultural / historical context can enlighten and alter the discussion about it.

Globally, the neo-liberal imperative pushing back egalitarianism began to take a hold in the eighties after two decades of revelation about existential threats to civilisation, primarily under the heading of ecosphere desctruction (climate change) and nuclear weapons, which exposed the centruries long (or millenially long) exploitation approach to be unsustainable. 

Some anthropologists (e.g. Jared Diamond) have suggested that societies past have reached such an existential crisis, somethimes choosing to change to survive while others have decided they'd rather hold on to their world view.  The neo-liberals I would suggest recognize that the challenge to their world view is planetary and has a feeling of finality about it this time.  Money being what it is to our exploitation culture, there is a thrust to accumulate greater and greater wealth into the hands of fewer and fewer entities (corporations, individuals) as a way of bringing the cutural history of their world view to a some sort of glorious conclusion, approaching a sort of economic sigularity if you will. 

 

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