Australia’s Broken Economy Is Hurting Young People And It’s Time To Do Something About It
Time to get creative.
Over the past couple of years there’s been a raging debate about generational inequality in Australia.
On one hand you have young people angry at the lack of affordable housing, a tough jobs market, repeated federal government attempts to cut university funding and jack up fees, and a new internship program that seems designed to consign an entire generation to indentured servitude.
And on the other hand you have older Australians saying it’s all about fucking avocados.
A big new report funded by the federal government and released today has confirmed that young people were right all along — things are getting tougher for us, and the generational wealth gap is growing. But it also shows that people right across the country, across all demographics, are struggling to keep up.
The challenge now is to come up with solutions to the growing economic problems we’re facing, and push our political parties into implementing them.
Australian Incomes Haven’t Increased In Nearly A Decade
Every year the federal Department of Social Services funds the Household, Income and Labour Dynamics in Australia Survey, known as HILDA. The survey itself is conducted by the University of Melbourne.
This year’s survey has attracted a lot of attention because the results are pretty depressing, particularly when it comes to young people, housing affordability and incomes.
The biggest problem is our incomes. They’re going backwards. Since 2012 median household incomes have been in slight decline
Household incomes are actually lower now than they were in 2009. Even though we missed the worst of the GFC we’re still experiencing its impact. The current period of income stagnation is a stark contrast to the healthy wage rises we saw throughout the 2000s.
There are bad numbers for uni graduates too. Finding a full-time job is becoming much harder. Only 17.1 percent of people who graduated between 2001 and 2005 were working part-time, but for younger people who graduated in 2012 and 2013 that number had risen to 25.2 percent.
Graduate pay has also collapsed at an alarming rate. In 2005, graduates who had been working for two years were earning $1,468 a week. But graduates from 2013 are only earning $1,023. That’s a 30 percent reduction.
Home Ownership Is Still Out Of Reach For Young Australians
The HILDA survey also shows that while 36 percent of Australians aged 18-39 owned a house in 2002, that figure had dropped to 25 percent in 2014. Only 2.4 percent of people between 18-24 and 19.9 percent of 25-29 year olds own a home. The average home debt has also doubled between 2002 and 2014.
What’s the consequence of that? Well more and more young people are living with their parents. Forty-eight percent of women and 60 percent of men aged 22-25 to be exact.
The housing crisis is now seriously messing with people’s ability to get laid!
Older Australians Are Getting Richer
While incomes are stagnating and house prices are skyrocketing there’s one demographic that’s done very well in the past decade: old people.
Between 2010-2014 the net wealth of every single age group has declined, except for people aged 65 and over.
Just look at that graph! Everyone is either flatlining or dropping, but the net wealth of older Australians has increased by more than 50 percent.
According to Roger Wilkins, the director of the HILDA survey, the median net wealth of people over 65 is now 4.5 times the net wealth of people aged 25 to 34. That ratio has increased from 2002 when it was just 2.8.
So yeah, generational inequality is absolutely on the rise.
It’s Time To Do Something About It
Ok, so now it’s blindingly obvious we have an economic problem in this country. Overall, things are sluggish. Incomes aren’t going up, housing is becoming less affordable and jobs are becoming more precarious.
These circumstances seem to be hitting young people the hardest, even those who have uni degrees. What’s the government’s plan? Well, they’ve got no idea on housing policy. Their jobs plan is to get young people to work for $4 hours in pubs and clubs. And they’re trying to increase student fees so young people graduating into an extremely tough jobs market are saddled with even more debt.
I know this is going to shock a lot of people but the Coalition either have zero understanding of how serious the problem is, or they just don’t give a shit. Let’s be honest, it’s most likely the latter.
There is some good news though. In recent days, both Labor and the Greens have released policies designed to tackle economic inequality in Australia.
Labor has announced policies designed to stop businesses and wealthy individuals from minimising their tax bill. If we seriously want to tackle inequality we need to accept that taxing the rich and spending that money on social services, health and education is a very important step. The good news is that most Australians support increasing taxes on businesses and the wealthy. So now it’s time to do it.
The Greens have unveiled a new housing policy to reform negative gearing and capital gains tax and make housing a less lucrative option for investors. Their policy would save the government $51 billion in lost revenue, thanks to the currently very generous tax incentives we provide investors.
Things are getting worse on pretty much every economic front and we’re going to need some creative ideas.
These are all good ideas and they would help redress the current imbalance. But while they might seem radical in the current Australia political context, they’re pretty mild compared to what’s happening overseas.
In the UK, Labour leader Jeremy Corbyn tapped into a huge groundswell of support from younger voters, partly due to his promise to abolish university fees. Why can’t we debate the same idea in Australia? Instead of constantly fighting against the Coalition’s plans to cut university funding, maybe it’s time to put forward our own ideas of how universities can work.
Maybe it’s time for some ambitious national programs to boost employment, perhaps by building affordable housing or renewable energy. The HILDA survey makes it clear that things are getting worse on pretty much every economic front and we’re going to need to come up with some creative ideas to tackle issues like housing, employment and education.
So while acknowledging the Coalition is pretty terrible, and Labor and the Greens are putting up some new policies, let’s push them all to be even better. Because the status quo is screwing us over, and it’s time we smashed it to bits.
Osman Faruqi is Junkee’s News and Politics Editor. He tweets at @oz_f.