Most millennials earn more than their parents did, but boomers still had it better, new research has revealed.
Leading economists have said there’s lots of good news for millennials, who are making more money than the parents did at their ages, but warn they are getting far less bang for their buck – especially in one key area.
Professor of Economics at the University of Technology Sydney Peter Siminski said millennials might feel hard done by, but their incomes were actually much higher than their parents.
“Sixty eight per cent of millennials are earning more income than their parents did at the same age,” Professor Siminski told The New Daily.
For those born between 1981 and 1987, and adjusting for CPI, he said the research showed millennials and gen-Xers were making more money than their parents did at the same age.
The differences between millennials and boomers are stark.
Compared to the older generation, millennials marry later and have children later. More go to university and for longer.
Professor Siminski said the pessimism many boomers had for their children’s future wasn’t always accurately placed.
“There was a survey done in 2019 that looked at how many people think their children will be better off, and less than 30 per cent said they will be,” he said.
“That’s a pretty high degree of pessimism. When you compare their earnings, things are not so bad.”
But a higher wage doesn’t automatically equal good news.
Millennials are less likely to own their own homes, are subject to low wage growth, and have the threat of climate change hanging over their heads, he said.
“If we continue to have low-income growth in general, mobility will go down,” Professor Siminski said.
“Growth is very flat, and inequality has been going up over 40 years – both of those things are not great.
“The effects of climate change, that’s also definitely going to hurt the projects of today’s children.”
Grattan Institute fellow Kate Griffiths said young Australians are in danger of falling behind.
“Wealth is pretty much flat. If we take the wealth of households under 35, that’s barely moved since 2004. Poorer, younger Australians have less,” Ms Griffiths said.
This was also true for housing, with a lot of millennials finding it impossible to enter the market.
“The poorest 20 per cent of young people, [in the 1980s] that group saw home ownership at 60 per cent. It’s now 20 per cent.
“Then, the Australian dream was accessible, to even not-so-well-off people.”
Now, she says it’s much harder, with older Australians reaping the benefits of the housing bubble in the early 2000s and tax concessions that benefit those over 65.
“A lot of older people’s income is to do with housing and super, which have grown faster than inflation,” Ms Griffiths said.
“While for many young people it has been stagnant or going backwards. And, of course, COVID hit young people much harder.”
So who is actually better off?
Angela Jackson, lead economist at Equity Economics, said it wasn’t all bad for millennials.
Incomes are rising overall, levels of education have gone through the roof and, yes, the younger generation has more earning power than their parents did at the same age.
“But we know on the flip side, asset price growth has mostly increased. That will keep boomers effectively ahead, and keep them the wealthiest generation,” she said.
She also called for changes to housing policy, to ensure more Australians could become home owners.
“It’s the biggest challenge,” she said.
“Millennials are in good jobs, better than their parents. There is a lot that is positive, but they are under stress. Not being able to afford a home makes life more difficult.”