Story: Ethnic inequalities

Page 5. Ethnicity and income

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Problems in measuring disparities

There are dangers in making overgeneralised statements about levels of ethnic disparity. Wide-ranging comparisons are often made between ethnic categories, comparing Māori and non-Māori, or Pacific and Asian people with Europeans. But the mix of success and hardship among these peoples is complex. The degrees of disadvantage within ethnic categories – for instance rural and urban Māori, local and foreign-born Pacific people, or long-settled and newly arrived Asian migrants – can be just as significant as those between them.

It is also important to consider the influences of factors such as socio-economic status, age, gender, regional differences and disability.

However, average comparisons between ethnic groups are a useful start, and highlight overall disparities.

Income of Māori and Pacific peoples

After the Second World War the difference between Māori and non-Māori incomes lessened. In 1951 Māori aged 15 and over earned on average two-thirds of the income of non-Māori. In 1986 Māori income was over three-quarters of the mean income of non-Māori.

From the 1980s extensive economic restructuring involving major job losses, shifts to user-pays for public services, and wide-ranging benefit cuts, touched the lives of all New Zealanders. However, Māori and Pacific people were particularly disadvantaged by these policies, and during the 1990s differences between Māori and non-Māori incomes increased again. The gap then decreased in the 2000s. There was a reduction in unemployment among Māori, and significant improvement in the earnings of Māori women. The income of Māori men relative to non-Māori hardly changed from 1991 to 2006.

In 2013 the median (middle value in range of high to low numbers) income of Māori was 78.9% of the national median income. In 2013 Pacific people’s median income was lower than the Māori figure, at 69% of the national median income. Māori were overrepresented among those in persistent poverty in the New Zealand Survey of Family, Income and Employment (SoFIE) 2002-2009, a longitudinal study of individual deprivation. 22% of Maori and Pacific children in this study were identified as likely to experience persistent deprivation.

Poor kids

In 2015 28% of children were living in low income homes. Fourteen percent of them were living in material hardship and 8% were living in severe poverty. The Children’s Commissioner, Judge Andrew Becroft commented that “We are in real danger of creating pockets of third generation ingrained poverty… We can’t accept that.”

Lower incomes mean that people struggle to meet the needs of their families. In a 2010 quality-of-life survey, 11% of Pākehā, 13% of Asian, 18% of Māori and 28% of Pacific people said that they did not have enough money to cover everyday needs.

Income of Asians

Despite the popular image of Asian immigrants as relatively wealthy, this is far from the case when particular groups are considered. Many Hong Kong Chinese, Taiwanese and Koreans, for example, were unemployed following their arrival in New Zealand, and many moved into self-employment because they could not find suitable jobs. A large number of Asians resident in New Zealand at any time are students, and others are low-paid casual workers or in small family businesses. This in part explains their relatively low median income in 2013 of $20,100 (compared with $22,500 for Māori and $30,900 for Europeans). In 2013, 27.2% of the Asian population earned $5,000 or less, compared with 16.3% for the whole population, 18.6% for Māori and 26.9% for Pacific people. Asians were not particularly well represented among the rich in 2013. While 28.3% of the total population earned over $50,000, only 18% of the Asian community did so.

How to cite this page:

David Pearson, 'Ethnic inequalities - Ethnicity and income', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/ethnic-inequalities/page-5 (accessed 21 May 2019)

Story by David Pearson, published 5 May 2011, reviewed & revised 21 May 2018