A growing divide between the generations is becoming even bigger, according to the latest edition of a long-running survey that tracks Australians’ wellbeing.
And the evidence of income disparity and wellbeing across the generations should be regarded as “the canary in the coalmine”, said a lead participant in the survey.
Deakin University, in partnership with Australian Unity, has been monitoring the wellbeing of Australian adults (aged 18-plus) for the past 22 years through the Australian Unity Wellbeing Index (AUWI). The partners have conducted 40 cross-sectional national surveys with 75,000 Australians since 2001.
This year, the survey found clear wellbeing and income divides. It also reported a crash in economic confidence, with survey results hitting their lowest level in the report’s history, even worse than during the Global Financial Crisis in 2007.
Cost-of-living pressures
Lead researcher Dr Kate Lycett, from the Deakin University school of psychology, said there was a “clear division” between generations in how people felt about their wellbeing.
Personal wellbeing was around 74 out of 100 for people under 55, compared to between 75 and 79 for older age groups.
By income, the wellbeing index was around 73 for people belonging to households with gross annual income of less than $100,000, compared to between 75 and 79 for higher-income households.
Dr Lycett said: “Rising living costs and interest rates are putting immense pressure on many people, particularly those with mortgages and those trying to get into the housing market. Without a lift in economic satisfaction, our national wellbeing will likely remain stagnant.”
Australian Unity chief executive for wealth and capital markets Esther Kerr said the findings likely reflect a “pressure cooker” effect caused by the rising cost of living, higher interest rates, stubborn inflation and global economic uncertainty.
She said the report should be a “call to action” for governments and businesses to implement a suite of policies to bridge the divide.
“This is the canary in the coal mine,” she said.
Half of Australians stressed
The report said more than half of Australians reported feeling financially stressed or were just making ends meet.
“However, this stress is not felt evenly across generations,” the report stated.
“For example, in the financial year ending in June 2023, living costs increased by 6-7 per cent for people who were retired, but almost 10 per cent for employees, who are more likely to have a mortgage and a family to support.”
This year’s survey questioned more than 2000 Australians aged 18-97 on a series of national and personal areas, including the economy, health and community.
While 2000 participants may not sound like a lot, the survey’s longevity allows it to confidently track the nation’s wellbeing.
Carer wellbeing
The survey also regularly examines special areas of interest, and the 2023 survey examined mental health and carer wellbeing.
“The topic of carer wellbeing was chosen given the important role that carers – unpaid and paid – play in our ageing population,” the report stated.
“With the number of people in Australia aged 65 and over expected to more than double over the next 40 years, demand for care is rising. Understanding the wellbeing implications of these developments on informal and professional carers is paramount.”
The report found carers felt they were not being supported in their role and as the amount of caring increased (more than 20 hours a week) their struggles also increased.
“Informal carers who cared for more than 20 hours a week recorded notably lower personal wellbeing and higher levels of mental distress compared to those in professional caring and non-caring roles. Those with a caring load of 40 hours or more seemed to be doing even worse,” says Dr Lycett.
Do you feel financially stressed? What’s changed for you over the past few years? Why not share your experience in the comments section below?
Also read: Interest rate rises can be good – for some
I find it distressing that many commentators equate spending by a particular sector (Boomers) with inflationary pressures. That might have been true if excess demand were the cause, but that’s not the case.
The primary driver of inflation in Oz at the moment is the continuing disruption of the Ukraine war and the increase in fossil fuel prices resulting from it. This affects every sector through increased costs of production and distribution.
Much of the increase in Boomer spending has been in travel, finally being prepared to risk movement after the worst of the pandemic, and in health care, in which costs are spiralling.
Either way, spending is a good thing. It keeps the economy moving, as the money is not lost, it pays wages, keeps people in jobs, supports growth, pays dividends to shareholders. Without the contribution of people spending the kids’ inheritance, the economy might slow and eventually stagnate under the pressure of higher mortgage rates and consequent tightening of belts by younger people.
Don’t listen to them when they accuse older people of causing the problem. We’re actually rescuing them.
I would also suggest that Boomers have nearly always been more frugal than the younger generations. For many Millenials to Gen Z, now is the first time they have had to cope with inflation and cost of living hardships. Not so the Boomers. If you have been used to spending all you earn “enjoying life” and now have to cut back on those restaurant meals, bought lunches, keep using last year’s mobile phone, take fewer or shorter overseas trips etc then of course you are going to think your life is awful. Boomers on the other hand have saved for literally decades, made sacrifices, provided for themselves and their families with little or no Government handouts and have generally lived within their means. They continue to do and at the same time help keep the hospitality and travel sectors employed. I wish people would just stop blaming Boomers for their own failure to budget, live within their means and refusal to lower expectations.
I am sick and tried of the Boomer label. I remember growing up my parents didn’t just go willy nilly with money they still had a hard time you couldn’t have what ever you wanted , as my parents and many more would say ” money doesn’t grow on trees ” you had to work and save. There is not many people that I know has the money to just pack up and go and I am one of them . Super was not compulsory back then it really didn’t come in till the late nineties and the way things are going what ever you had or have wont really last. I am one that didn’t have super as a lot of people my age so what ever I do I have to save to go way or buy something I am not saying poor me . Kids nowadays want every thing now so they just spend and not think of the future its all about having a good time . I am not labelling them all the same either as they label all boomers
It is easier to blame someone for the ill of the economy and the suffering of the losers (younger generations). No one has bothered to look at the causes and effects of the current cost-of-living pressure and what to do with it.
The boomers did have secured jobs and a steady banking system to finance their homes to raise their families. The stability of the then economy was due to the closed economy, which enabled the then government to protect the economy from external supply change from overseas. Our economy prospered after WWII with the increase of immigrants for our workforce and their expansion of consumption to expand our economy. This was the golden years of our economy and nation, no dispute about that. However, boomers should not be blamed for the subsequent contraction of the economy.
Our younger generations are living in an open economy under the framework of Globalization. Under this system, we benefit from cheap imports of clothing, toys, electronic goods, technology, and foreign investments in our energy industries. All these are in exchange for the export of our minerals. Our economy is wide open to overseas competition and external supply chains. Additionally, we are no longer a manufacturing nation and rely on overseas supply. Australia is now mainly a service-based economy, and wages for services are low, e.g. industries in aged care, child care, hospitality, and tourism. Our industries are no longer integrated into the supply chain. Productivity is a measure of input and output in determining wages. What investment in services will improve our productivity, compared with Germany, America, and Denmark? I rest my case.
Back in the old days when I was working, I only needed to have a 5% deposit for a mortgage loan. It was a struggle for me, but I made it with three years of savings. Today our younger generation needs ten or more years to save for a deposit, because of the lower wages. I serviced my repayments of the loan with one-third of my salary, but today, the young ones have to service their repayment with 60% to 70% of their pay. Boomers are not responsible for this open economy.
RBA HAS consistently raised interest rates to tame the domestic inflation rate but without the distinctions between the causes and effects of overseas supply change on the domestic environment. RBA monetary policy of interest rises can only affect a moderate control of the inflation rate, if it is caused by external factors, like petrol and fuel supply. The cost-living pressure on the mortgage payers only benefits the profitability of the Banks and their shareholders. Rich parents with lucrative bank dividends to help their children secure properties over $2 to $3 million do not ease housing affordability. It has the opposite effect, it makes housing more expensive.
We need to control our population growth: both natural birth growth and immigration. It is an investment in our human resources. The Federal Government needs to control this demography to match our industries. From then on we to establish our labour needs for our industries and the well-being of our workforce. Then we can plan our supply chains for infrastructure and housing supply with the support of our finance industry.
I know it sounds simple. I hope my suggestions will receive favourable consideration.
It is disappointing to hear this morning that the RBA Governor concluded that Australia’s inflation rate is homegrown due to an increase in visits to dentists, hairdressers, and restaurants and their high costs. As I mentioned in my earlier response here, we need to discover the causes and effects. Here, the RBA Governor has given us three examples, which need a lot of explanation for her conclusion and how further increase of interest rate will curb our inflation rates.
Firstly, an increase in visits to dentists by Australians has been demonized as a factor causing an increase in the inflation rate. As we all saw the ads on TV there is a health campaign on osteoporosis. Currently, 1.2 million Australians suffer from this illness, and a further 6.3 Australians with low bone density, totalling 7.5 million Australians suffering from this disease. The protocol for this treatment requires these Australians to complete the dental work before the osteoporosis injections can commence. My friend is one of these Australians, who spent approximately $19,500.00 for his dental reconstruction and 4 implants to last the rest of his life. Using his cost as a guide and times 7.5 million Australians, it would total $150 billion, as an estimate. Because of the health campaign led by Ita Buttrose, and the Federal Health Minister, the DEXA scan is now included as part of the Medicare cover. The scan will increase the discovery of more Australians suffering from this disease. How many more interest rates will be raised by RBA to curb Australia’s inflation rate? Will the increase in interest rates control and reduce the number of Australians suffering from this disease to decrease our inflation rate? We don’t have to be an economist to work this out.
Secondly, the vanity of more visits to beauty salons and hairdressers. I live in Sydney CBD and have seen several barber shops close for business. My younger members of the family have their hair cut at home with a kit from Kmart. Two members of my family have even shaved their heads to combat the cost-of-living pressure. I do that, too. Please don’t kill this industry. A lot of migrants depend on it.
Thirdly, another cause of inflation is that we dine out too much and too often. Please remember, that Australia has for decades been a service-based economy, relying on tourism and hospitality. There have been many claims that because of housing unaffordability, homeowners and renters must service their mortgage repayments or rent payments with 60% to 70% of their wages or income. Where do they get the money to have excessive dining out? This scenario does not fit the daily far cry of housing affordability. Please, do not use the interest rates to kill these tourism and hospitality industries.
In due respect, the arguments for increasing interest rates to tame our inflation rates do not support what the average Australians are going through. I stand to be corrected if I am wrong.