A new book by Dr Jennifer Rayner claims that Australia’s Generation Y (aka “Millennials”) are facing a bleak future when it comes to jobs, houses, skills and finances. From The New Daily:
“We’re going backwards in wealth, which means the way we plan for the rest of our life as we grow older is much different from our parents’ generation and older generations,” [Rayner] said…
It’s not just the property problem that has Gen Y banging their heads against the wall; it’s the deadly cocktail of an increasingly casualised workforce, increasing debt, disappearing manual labour work and a “grey ceiling” of older workers who refuse to budge from senior positions in the workforce that is shaping a bleak future for our second-youngest generation.
“When you look at the data, you’ll see that wages have grown twice as fast for people over 50 than under 30, and that one in six people are unemployed as compared to one in 30 back in the 1970s,” Dr Rayner said…
Unless politicians and businesses start introducing Gen Y-friendly policies, for the first time in its history, Australia will be left with a generation that is less wealthy than the one before it, the author said.
It’s hard to disagree with any of this.
The Grattan Institute’s Wealth of Generations report showed that older households have captured most of the growth in Australia’s wealth, whereas younger cohorts have gone backwards:
And the main cause of the wealth divide? You guessed it, escalating house values:
Which has crushed home ownership rates among the younger cohorts:
Older households have also benefited from strong income growth, which has outpaced their rising consumption spending, whereas the younger generation’s have enjoyed far less growth in both incomes and consumption:
And the older generations have enjoyed a massive increase in fiscal transfers (e.g. the Aged Pension), paid for by the younger generations:
Meanwhile, younger Generation Y’s – those aged 15 to 24 years old – are also experiencing labour underutilisation (unemployment plus underemployment) of 30%, which is close to the highest level in Australia’s modern history:
All of which highlights the egregiousness of the Turnbull Government’s support of higher house prices via the maintenance of negative gearing and the capital gains tax discount, along with its proposed cuts to education funding. These policies are designed to keep the foot on Gen Y’s collective head.