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The Productivity Commission's Inquiry on "disadvantage" misled the Cabinet (and the Kiwi Public)

The Productivity Commission has just released an "Inquiry" on disadvantage, poverty & inequality. Isn't that meant to be the job of the Ministry of Social Development? Anyhow, the Inquiry is called, "A fair chance for all - Breaking the cycle of persistent disadvantage". The word "productivity" barely rates a mention - about 12 times throughout the body of the 179 page report (aside from appearing in endless repetitions of the name, "Productivity Commission"). By contrast, the word "disadvantage" occurs 545 times.


The Inquiry describes "four barriers as underlying drivers of disadvantage" being power imbalances, discrimination, siloed government & short-termism by politicians. It argues these have hurt Māori & Pacific people's life satisfaction & well-being particularly badly, since "Any experience of disadvantage negatively affects life satisfaction and wellbeing .. As might be expected, we found that people with no temporary or persistent disadvantage have the highest life satisfaction scores of any group. Life satisfaction declines when disadvantage in any domain is experienced, and it decreases further if disadvantage is experienced in multiple domains or over longer time periods".


Raising well-being for disadvantaged groups & indigenous development are two of my fields in economics, so let's look at the assumed stark differences in life satisfaction, depending on ethnicity, that form the foundation of the entire Inquiry. Below are Stats NZ figures (that were never reported by the Commission):

Average life satisfaction across all ethnicities is the same, at 7.9 out of 10. A higher proportion of Māori & Pacific peoples report 10 out of 10 compared to any other ethnic group. Amazingly, 22% of Pacific peoples and 21% of Māori rate themselves as a perfect 10 score, compared to 16% of Europeans.


These findings are the opposite to those reported by the Commission. Why did it hide the incredible levels of life satisfaction experienced by most Māori & Pacific peoples? Does the Chair of the Productivity Commission not know about the well-being statistics and important academic articles that have been written in this field?


When we invited the founder of well-being economics, Professor Richard Easterlin, out for a visit he specifically referred to this finding. Why? Since he considers the most disadvantaged folks to be those trapped on the hedonic treadmill, which is the quest for more material goods & services in a never-ending struggle to "keep up with the Joneses".


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