What’s worse? Higher inflation or unemployment?
What’s worse? Higher inflation or unemployment?
Media interest in a large-scale study by New Zealand researchers about how inflation and unemployment make people feel has one of the researchers asking why the Reserve Bank hasn’t been in touch.
Mōrena and welcome to The Bulletin for Wednesday, July 27, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: ministers to be called as witnesses in donations trial; smoke-free legislation could dramatically increase life expectancy of Māori women; Te Puke or Hawai’i; but first, an answer on whether rising inflation and rising unemployment makes us feel worse.
What’s worse? Higher inflation or unemployment? (Image: Tina Tiller)
Captain Obvious and Captain Hindsight
Yesterday Stats NZ reported its household living-costs price index figures for the June quarter. Captain Obvious here, but costs have increased by 7.4% on the same time last year. Most of us are in for a “virtual pay cut”. Meanwhile, as Stuff’s Luke Malpass reports, the National Party is hoping criticism of the Reserve Bank (RBNZ) opens up a new front in the “cost-of-living fight with the government”. Finance minister Grant Robertson called opposition leader Christoper Luxon “Captain Hindsight” yesterday in response to National’s calls for an inquiry into the Bank's monetary policy. Sidenote: Captain Hindsight is a South Park character with perfect 20/20 hindsight.
New Zealand research into inflation and unemployment catches eye of the New York Times
The reality of confronting rising inflation for the first time in decades is probably why research from three New Zealanders caught the eye of a New York Times business writer last week. The study correlated data from the Gallup World Poll from 2005 to 2019 about how people feel about their lives and economic conditions at the time in each country. Former BusinessWeek writer, Peter Coy featured the research in his New York Times opinion column (paywalled) last week, asking “What’s worse, higher inflation or higher unemployment?” Coy writes that the question is at the core of the debate over how rapidly central banks should raise interest rates to cool off the economy and bring inflation down.
Increasing unemployment has much greater impact on our wellbeing than rising inflation
A version of the study was published online in 2020 but it is due to be published in the American Journal of Money, Credit and Banking. Coy has called the research findings “remarkable”. A 1% point rise in the unemployment rate has 4.6 times as large an effect on sadness as a 1% point rise in inflation. Coy says “the beauty of the study is that it’s unbiased; the people answering the questions about their feelings had no idea that their answers would one day be used to assess the impact of inflation and unemployment on their lives.”
Government should better define what aspect of well-being it would like RBNZ to promote
The Spinoff’s Chris Schulz interviewed one of the study’s authors, Robert MacCulloch this week. The thing is, MacCulloch isn’t that bothered if I write about this, if Chris Schulz writes about this or if Peter Coy from the New York Times writes about this. One of the research’s main takeaways is that the government should better define what aspect of well-being it would like the RBNZ to promote in order to implement its statutory objective. Speaking to Schulz he said “You’ve rung up and the New York Times rang up about it. The amazing thing is that the Reserve Bank’s never rung up. It’s never shown a molecule of interest … I’ve had zero interest. Why not?”
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Simon Bridges, ministers Andrew Little and Michael Wood to be called as witnesses
Toby Manhire reports from the first day of the trial relating to political donations to both National and Labour at the Auckland High Court. Seven defendants are facing charges of obtaining by deception following a Serious Fraud Office investigation. The Crown laid out its case, which it said has “sham donors” at its heart, while counsel for one of the defendants said the case was “a theory in search of evidence … animated by predetermination, fuelled by speculation, and dependent on some Eurocentric, cringe-inducing cultural assumptions.” Simon Bridges, ministers Andrew Little and Michael Wood and Jacinda Ardern’s chief press secretary Andrew Campbell are among the witnesses the Crown will call.
Smokefree amendment bill would dramatically increase life expectancy for Māori women
Modelling by the University of Otago’s ASPIRE 2025 research centre found that if the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Bill was passed, there would be a dramatic increase in life expectancy for Māori women. The bill was introduced to parliament by associate health minister Ayesha Verrall and had its first reading yesterday. If it is passed, it will mean anyone born on or after January 1, 2009, will never be able to purchase tobacco products. It has the backing of the vast majority of MPs with National, the Greens and Te Pāti Māori supporting it at first reading.
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Christopher Luxon video situates him in Te Puke while he was in Hawai’i
Writing about the social media post that referenced Luxon being in Te Puke “today” while he was in fact in Hawai’i, the Herald’s Claire Trevett says (paywalled) says “It may well have been a rookie mistake and not intended to be misleading but misleading is very much in the eye of the beholder. It was an unforced error Luxon could do without.” On one hand, a politician is entitled to a holiday and people make mistakes. On the other hand, the leader of the opposition said he wasn’t losing sleep over what he called a mistake, but in the same breath said he was losing sleep over the cost of living which is bound to irk some people. On the upside, it has created an opportunity to weigh up the merits of Te Puke and Hawai’i as holiday destinations which Stewart Sowman-Lund has helpfully done for us on The Spinoff.
Click and collect
Auckland mayoral candidates egged during public debate last night.
Former Massey University student, Shehan Karunatilaka on the Booker prize longlist.
More detail on possible fines for supermarkets that breach the new code of conduct.
Corporate cash donations to charity fell by more than 40% between 2018-20.
Former ombudsman calls the Official Information Act a horse and cart on a Formula One racetrack.
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz
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Want to know when the best time is to buy cheese? Ben Gracewood has spotted an interesting pattern in The Spinoff Cheese Index. Chris Schulz has the numbers that show the zero percent alcohol trend is here to stay. Sam Brooks checks in with the NZ queens of RuPaul’s Drag Race Down Under season one to find out what they're up to now. Steve Kilgallon finds out what it takes to be crowned the supermarket checkout operator of the year. I write a letter to our biggest failure.
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The differences coaching women and men
Lockeroom’s Suzanne McFadden talks to Black Sticks coaches Verity Sharland and Darren Smith on the eve of the Commonwealth Games about the differences between coaching men and women. Smith is a former coach of the men’s national hockey team. The Black Sticks made it to the quarterfinals of the world cup in The Netherlands a fortnight ago and won gold at the last Commonwealth Games in 2018. They play their first game in Birmingham on Friday night (8pm NZT) against Kenya.
