Why it’s more expensive to be poor

source :

Wellington woman Debbie Leyland says the advantage – if you can call it that – of being poor is that you get used to it.

“It’s terrible, because no one has to get used to not being able to buy vegetables, fruit or whatever. It’s terrible, but it’s just the way it is.”

She is on health benefits and lives in a Housing New Zealand home. After paying her rent and utility bills, she says, she usually has about $190 a week left over for food, transportation, internet and all the other costs that come with it.

When it is a week in which she also has to help her two children, who sometimes struggle with money, she looks on the supermarket shelves and wonders what she could buy.

She said it worked out more expensive because she was living from week to week. She couldn’t afford to buy food in bulk or buy frozen food to store in her freezer. Instead, she had to go to the store a few times a week to buy vegetables. She is a vegetarian, but feels the pressure of rising food prices.

“Yesterday I went to Pak’nSave, I wanted to get potatoes, broccoli and some kumara – $10.90 for a kilo of kumara is insane.”

She said things had gotten a lot harder over the past six months. “If I could buy in bulk, I could get a big bag of potatoes for $20, but I don’t have the money. It’s still rising, it’s ridiculous and it worries me too.”

She said processed food was a lot cheaper. “Being poor has a knock-on effect: if you have a family, you buy the cheapest, processed stuff because you have no choice.”

Poverty was a faceless issue, Leyland said, but there were thousands of people facing similar decisions as they tried to feed their families. “People need to understand that people living in poverty are not lazy or anything, but poor. No one wakes up and says, ‘I want to live in poverty today’.”

Craig Renney, policy director at the NZ Council of Trade Unions, said Leyland’s story was well known.

“My mother always said it costs a lot of money to be poor. Everything you buy when you are poor and have no choice is more expensive. If you want to borrow money when you are poor, it will cost more. If you want to buy a car it costs more because you end up buying it on hire purchase for a longer period of time… if you don’t have access to a vehicle and have to go to the local dairy when you go shopping, it’s more expensive.”


Children’s Commissioner Judge Frances Eivers announces the Child Poverty Monitor 2022.

People who had to live further outside the city would have higher travel costs.

He said things like housing are also much more expensive over a person’s lifetime. “When you rent, you pay money until the day you die. When you own your own home, you don’t. You buy back your own possessions… it costs a lot of money to be rich but it costs even more to be poor. In proportion, your disposable income becomes smaller because essential costs are more expensive.’

David Riley, a spokesman for the Child Poverty Action Group, pointed to research from Powerswitch showing that prepayments, often used by people who don’t have a good credit history, could be 8% to 23% more expensive. In addition, power was often more expensive in remote areas where housing could be cheaper.

“Some electricity retailers charge disconnection and/or reconnection fees. Prepayment plans may incur additional charges when topping up or asking for credit status etc. There is currently a campaign and petition to end disconnection and reconnection charges and to make the Electricity Authority’s Consumer Guidelines mandatory. ”

People who lived in more remote areas also tended to face more barriers to getting high-quality internet connections.

“There are many more factors that lead to poverty. We know that being Maori or Pasifika, disabled or living in a household with someone with a disability all increase the likelihood of living in poverty. The assumption is that these people will face higher costs and a reduced or no capacity to earn more. Transport is a major expense and living in rural areas, the cost of getting something delivered is significantly higher.”

Renney said household cost-of-living data from Stats NZ showed that the cost of living for the poorest 20% of households has risen faster than that of the top 20% over the past 15 years. “Things like mobile phones, IT and ordinary items have even become cheaper based on quality. But rents, food prices and things like that rose much faster than general inflation.”

That had only recently changed when interest rates began to rise rapidly.

Whether the trend returns will depend on how quickly core inflation declines as interest rates level off.

source :

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button