Younger than 35 are experiencing low to negative income growth – but there are real ways of actually getting around it
- Stats throughout history
- How to increase your income – whilst this is a real issue, there are real ways of actually getting around it.
- The ‘Smashed Avo’ reference – the idea young people can’t afford to buy a house because they’re living large.
- The origins of ‘smashed avo’ as a reference to millennial laziness, meanwhile, go back to a column by a middle-aged man named Bernard Salt, who is a partner at one of the big four accounting firms.
- Living an easy life of brunch, Instagram and maxing out their credit cards. Then they have the audacity to complain about the price of housing!
Let’s look at the stats…
Sources: Productivity Commission estimates using Australian Bureau of Statistics (Microdata: Household Expenditure, Income and Housing, 2015-16) and ABS Household Expenditure Survey basic confidentialised unit record files 88-89 through 2009-10.
- Shows “real” income
- Shows age groups and time periods of 5 years
During the 10-year period between 1988-1998, those aged 25-34 saw the largest increase in wage growth.
But that that all stopped in 2009-10.
- Since 2009-10, growth in real income has been OK for other age brackets.
- An individual will still normally gain income as their age increases from 25 to 34. But that income gain will be swimming upstream against a general downtrend in real income for people of that age group.
- In previous eras, the income gain associated with gaining age and experience was boosted by a general uptrend.
- Businesses and wage growth also go through cyclical change, which needs to be considered when looking at these figures.
- Those over 65 are having the highest increase of income of around 2% (in line with increases of Age Pension)
- Below 35 are experiencing low to negative income growth
Grow your income
- Increasing your income is a long-term journey and doesn’t happen overnight.
- Employment – Starting early to maximise lifetime earnings, review your pay with your current employer, upskill yourself to provide real value to employers.
- Investments – Increase your income personally and reinvest the income from property and shares
- Higher disposable incomes – Getting out of bad debt or reducing discretionary expenses