The Grattan Institute’s recent report Generation gap: ensuring a fair go for younger Australians, highlights that younger generations are not making the same economic gains as their predecessors.
This is not for a love of dining out or luxury. In fact, the report says that young people are spending less on non-essential items such as alcohol, clothes shopping and personal care than three decades ago, and more on necessities such as housing,
Generation-on-generation economic progress has been the norm for Australians for the past century. So why is this coming to a halt?
From low wage growth and higher cost of living, to tax concessions and an ageing population, the reasons for this intergenerational gap widening are diverse.
If this is to become the new normal of the Australian economy, Grattan predict that a generation could emerge from young adulthood with lower incomes than the one before it. This is unprecedented in Australia, but has already happened in the United States and the United Kingdom.
FYA research confirms many of these challenges to young people’s prosperity, finding it takes an average of 2.6 years for young people to secure full-time work after full-time education, compared with just one year in 1986. This is in spite of young people being better educated than ever before, with almost 60% of 25 year-olds holding a post-school qualification. Grattan point out that more education typically means a higher earnings later, but the report found that the earnings premium for university graduates aged 25-34 was lower in 2016 than it was in 2006.
In addition to recommending new skills and pathways we can support young people to develop develop, our New Work Reality report isolates the demographic factors to determine what can be done to level the playing field between young people and older generations. This is especially necessary for those who have traditionally been disadvantaged due to factors like socio-economic status or gender.
So just as the causes of pressure on young people are diverse, so too the solutions can be. And they must involve all Australians.
Through a combination of educational reform, policy shifts and the embracing of a new mindset about young people, we can collectively ensure that young Australians have the skills and experience for the jobs of the future, not the past.
We are committed to a future where young Australians contribute meaningfully and thrive in work and life. FYA’s Future Skills Framework 2030 outlines how Australian governments can work with young people, industry, educational institutions and leading thinkers across the country to move from talk to action.
Find out more about FYA’s Future Skills 2030 campaign. Download the fact sheet, join our call and help us back young people.