According to the author of Generation Less: How Australia is Cheating the Young, yes we are – and there’s data to prove it.
Former federal political advisor Jennifer Rayner is speaking at the Festival of Dangerous Ideas this weekend about inequality between Boomers and Millennials, and how it’s pricing young Aussies out of a secure and stable future. In her essay, the 30-year-old compares the data for young people today against those of our parents, including employment, wages and property prices.
“When you go back 30 years and start comparing how things changed for young Australians that’s when you see the gap has opened up quite significantly,” says Rayner, a proud Millennial.
“When my parents were leaving school and looking for work, less than one-in-30 young people said they were under-employed. Today, that number’s up to one-in-six.”
In our parents’ day, buying a first home could cost three times the average annual income. Today, we’re looking at the equivalent of six or seven times the average income – and up to ten times the average income of a young person in areas like Sydney.
“The figures really indicate that it’s not because we’re not trying, it’s that the situation has got a lot worse in some pretty important ways,” says Rayner.
“Wages have grown twice as fast for people in their late 50s as for those in their early 20s,” she adds. “So older people now earn about $600 a week more than people in their early 20s. In the 1990s, that was only about $200 a week more.”
So why are we in this mess? Rayner makes it clear that no one’s to blame. It’s a cumulative impact of government policies that have favoured the older generations above the younger people in society. The nature of economy has changed, too, meaning there are fewer entry-level jobs on the market and very little opportunity for young people to accumulate wealth via property ownership.
“If property prices weren’t spiking really quickly, it wouldn’t be such a problem that our wages are growing slowly. But when you have wages growing so slowly and property prices going off the charts, those two things work in tandem to make it really hard for young people to build up any wealth or stability.”
Rayner suggests we hold older generations accountable if they don’t support policy changes to negative gearing and capital gains tax, which would make housing a lot more affordable. “We shouldn’t blame them for this situation because no one created it.”
“If nothing changes, I’m really concerned that people in my generation and those coming after us are going to end up as an underclass of Australians. We’ll have very insecure work, and as a result we will not grow very much wealth over our lifetime.”
If owning property should still be a priority for young Aussies, why aren’t we saving for deposits? Rayner says you could forgive us for not swapping weekend cocktails for years of penny pinching.
“When my parents were trying to get a deposit together for a house they could do that within a year or two and have enough to build a brand-new house about 15 minutes from the city in Canberra, where I grew up,” says Rayner. “Today it could take five, six, seven years to save a deposit for a house that might be two hours from the city, in a suburb that you don’t want to live in anyway. So the rewards of that saving, and the time required is very different.”
Interestingly, we’re not spending a greater amount of our disposable income on luxury goods than our parents did. So you can store that gem for the next time your parents nod to the iPhone in your hand or the PlayStation games on your shelf. “We spend about the same on things like technology, it’s just that in the 1980s the amount that you would spend from disposable income would allow you to buy just one TV, the prices of those items have come down.”
Ultimately, Gen Y isn’t asking for that much more than what our parents or our grandparents enjoyed. “I think this generation of Australians and probably all future ones want the same thing: the opportunity to build a stable and secure life,” says Rayner. “I don’t think that has really changed in more than 100 years.”
You can hear from Jennifer Rayner at the Festival of Dangerous Ideas on Sunday September 4.