Millenials vs boomers… It’s a hot topic as of late, which essentially boils down to each generation calling each other entitled in some form or other. Oh and something about avocados and house prices.
But is there something to investigate here? Or is it just a case of millenials harbouring lingering adolescent angst and bitter boomer parents who were “cool before we had you!”...
When you think about it, millenials who sit between 25 and 39 years old, are at the age of first home ownership and therefore beginning to feel the pressures of the housing market. Baby boomers are no doubt more established in this area, but surely they worked just as hard to get where they are now?
There’s a few avenues we can explore to sort this one out, including income, employment, and education, and of course the ultimate question - housing. Let’s cover a few of these bases to measure up expenses and general quality of life. So before you smash your avos, let’s compare apples with apples.
Talkin’ ‘bout your generation
It’s all well and good to throw labels around, but what do they actually mean? First things first - baby boomers. Born between 1945 and 1964, the boomers are the result of a spike in new births that followed the end of the Second World War. They are a large cohort and a result of the newfound peace in the world. They sat in stark comparison to ‘The Silent Generation’ born between 1925 to 1944, who were betrodden by economic depression and war.
Baby boomers today are aged anywhere between 55 to 74, and in their heyday were known as a bit of a rebellious bunch. Boomers are the age group that started as hippies and ended as punks - free love, protest and rock and roll. Sure, they probably didn't all sport flowers in their hair or clothing pins through their ears, but as a whole, the baby boomers are one of the most revolutionary generations ever.
Millennials, on the other hand, were born between 1980 and 1996, making them between 23 and 39 years old. They are the first generation to grow up with household digital technology, like a living room PC or the hidden Gameboy under pillows for all-night Mario Kart purposes. Most can probably still remember being young at the turn of the millennium, staying up until the midnight fireworks while their parents got a little too ‘tipsy’.
Speaking of which, most parents of millenials are baby boomers, rather than the in between Generation X (born between 1965 and 1980). So you could say that millenials and boomers know each other well. Perhaps the discourse between the two cuts a little deeper and has something to do with parent - child relationships. Of course parents want the best for their children but they also want to kick them into gear to work hard. And of course kids will always push back, after all they just want to discover their place in the world, free of their parents framework and restrictions.
It’s pretty common to hear boomers calling the younger generation lazy, entitled, technology obsessed, and stupid with money (purchasing $10 smashed avo on toast). It's also fairly common to hear millennials calling boomers out of touch, greedy and entitled in their own way, often pointing to their free education and cheaper housing.
These assumptions and stereotypes are pretty commonplace, but are they always helpful? Sociology Professor Steven Roberts from Monash University has recently voiced concern at the manner in which different generations lump together opinions and stereotypes.
“One of the most common discourses is that millenials are entitled and narcissistic and a bit self-absorbed and even lazy… there’s this idea that it’s like ‘the young people of today, they’re not like they were in my day’ and this is something that we see across history.. going right the way back to Ancient Greece. By the time they reach their 50s and 60s they forget that contemporary young people are kind of mirroring their own experience,” stated Roberts in an interview with the ABC.
“They say ‘contemporary young people are snowflakes and they complain about everything and that they don’t put in the hard yards (but) there’s no empirical data to support that.”
Alright, as the good Professor says, let’s stop the assumptions and name calling and take a look at some good old empirical data.
I owe the government how much?
One of the first intergenerational talking points that gets pulled out with these sorts of discussions is educational debt. Following a legislation introduced by Gough Whitlam, university was free in Australia in the 15 years between 1974 and 1988. This particularly served baby boomers well as it was the time most of them attended tertiary education. That’s all well and good, but how about millenials?
The latest government statistics reveal that the total amount of outstanding HELP debt reached $62 billion in June 2018, up from $54.0 billion in 2016–17. In fact it’s increased at an exponential rate for the last 10 years. Take a look at the curve on the graph below.
According to the same data, the number of people with outstanding debt has increased to 2.9 million in 2017-2018, up from 2.7 million the year before. This might already seem hefty, but the number of debts above $50,000 also increased to 208,146 from 159,475 in 2016–17. In addition to this, the time taken to repay HELP debts rose to 9.1 years from 8.9 years the year before.
From the statistics, it’s easy to see that HELP debt isn’t getting any cheaper or easier to pay off. Rather the opposite. In this regard, it’s safe to assume that millennials are doing it a bit tougher than baby boomers in this aspect, who had none of these concerns.
Job instability growing
Alright so there’s a fair bit of debt for millenials to cover, but what about on the job front? Surely there must be plenty of well paying gigs for graduates to pay their dues and for the average battler to get ahead? Let’s take another dive into some cold hard stats for this one.
While the rate of unemployment for youths has declined throughout the years, the rate of underemployment (those that have work but would like to work more) has notably risen.
The underemployment rate when baby boomers entered the workforce (aged 20-24 years old), was around 2-5%. When millennials entered the workforce, underemployment rates were significantly higher between 8-16%.
These days a lot of millenials are finding it hard to secure stable employment with the rate of underemployment currently sitting at 14.8% (ABS, May 2019). According to a recent Vice survey, more than half of millennials said that they would prefer to work more than less.
The underemployment rate for persons aged 20-24 has not been below 10% since 2012
So it seems again, millennials are doing it tough. Well, at least tougher than baby boomers before disco died. Around two in five millenials have uni degrees, which is significantly more than one in four for baby boomers, yet youth underemployment remain high. Part of the reason for this is the rise of the ‘gig economy’, or a highly casualised job landscape that has grown substantially in the post GFC world. Another employment trend that has sprung up during this timeframe is the increasing prevalence of internship culture. Internships have become favourable to employers who do not wish to commit to workers, and increasingly these positions have gone underpaid or unpaid. A recent study by the Department of Employment found that unpaid internships are on the rise, and that just one in four led to further employment opportunities.
Oh, one more thing. Artificial intelligence might also take all their jobs.
Yes, kind of like a sci-fi movie. There’s no question that the rise of technology and machine learning makes most of us nervous, but while boomers will be watching the robot revolution from their comfy retirement homes, millennials could very well become the Terminator’s new coffee retriever.
In all seriousness, a recent Deloitte survey found that 49% of millenials believe new technologies will augment their jobs. 46% of Millennials also agreed that the changing nature of work may make it harder to find or change jobs in the future.
Disposable income (avocado seeds)
Now for the all important question. How many smashed avos on toast can millenials afford? The answer - none, because they are way too overpriced no matter what generation you’re from. Eggs Benedict is a much more wholesome brunch option, but considering disposable income across the board is on the decrease, maybe we should all just wait until lunch.
32% of Australian Millennials live paycheck to paycheck
According to a report by the ABC disposable income is at a 20 year lull - including the godforsaken GFC. This is largely a result of stubbornly stagnant wage growth. An article by Macrobuisness also places current household disposable income per capita at half of what it was in the 1970s.
No surprises then that according to a Vice survey 32% of Australian Millennials live paycheck to paycheck. But according to the same survey, an average of 69% of disposable income was spent on unnecessary pleasures, such as shopping, partying, take away food and erm... overpriced brunches.
When it comes down to it, a spare dollar just doesn’t go as far as it did - considering the rising electricity prices, petrol forever on the ascent, the general cost of living, as well as new expenses that were unknown to young boomers, such as superannuation and HELP debt. And that’s not to mention the continual hike in rent prices...
Shift to renting
How many young people do you know own houses? There might be a few, but chances are there’s even less of them that are owner occupiers. A report by CEDA states that a larger percentage of young people are choosing to rent than ever before, with the share of renters aged between 25 and 34 years jumping 22% from 1982 to 2012.
The result is that renters have overtaken homeowners in the same age bracket and that renters without investment properties have soared around two-thirds. In 2015-16 over half of younger households (57%) lived in privately rented dwellings, compared with 42% of younger households 20 years ago. Renting is by far the most common choice for younger people. But why?
The obvious answer would be that they can’t afford to purchase a property. But let’s not assume just yet.
Home ownership rates
According to 2017 APH data, home ownership rates have taken a tumble for the same 25-34 year age bracket since 1986. In the 80s, 60% of this age group owned a property. Today however, it’s less than 45%. It’s really not surprising considering the huge increases in house prices during this period. As you’d also expect, there’s also been a steep decline in younger households who have managed to pay off their mortgage - an almost mythical feat in this day and age seen only in 2% of households. It’s hard to imagine that just 20 years ago almost 10% of young households had paid off their mortgage.
A report by CEDA found that almost all of millenials have experienced economic constraints when it comes to housing, which has greatly altered their market choices. Many have been forced to purchase lower priced homes on the fringes or make do with apartments, which has changed the character of the young family. This choice often doesn’t even reduce debt as the maximum amount still needs to be borrowed. Some may be able to fill the gap with a boomer institution known as the ‘bank of mum and dad’ but, many lower income households struggle or simply cannot afford to buy in the first place.
In an interview with the ABC Ben Phillips, from the Australian National University's Centre for Social Research, has stated that older Australians and younger Australians are in different worlds when it comes to housing.
"I think it's quite clear that older Australians have done very well out of the property boom. So the average older household in Australia effectively was getting a wealth boost every year of about $60,000, and that's a free kick the younger generation will not get… Those on low incomes who are between 25 and 34 [have] very little chance of owning their own home.”
So you wanna buy a house?
Who doesn’t want their own well-mowed quarter-acre of this fine land? Perhaps a Hills Hoist and a labrador too. It’s home ownership, the Australian dream.
But how realistic is the dream in this day and age? Despite the housing market sitting in a bit of a lull, property in Australia is still especially expensive. At the same time, despite wage growth stagnating in the past few years, workers earn a lot more in 2018 than they did in decades past. But have wages kept up with housing prices? Let’s bring millenials and boomers back into the equation and investigate who really has/had it better off.
Check out the metholodology here.
What's the verdict?
Do millennials have it worse than their parents? In most of the avenues we’ve explored it certainly seems so.
In 2014 Grattan Institute CEO John Daley made news when he stated "There's a real risk that we'll end up with a generation in Australia less well-off than its parents." The statement came after the findings of a new report found that younger Australians under 35 were worse off than they were eight years ago. It also pointed to slow wage growth, an accruement of government debt that millennials will eventually pay for, as well as the extensive aged pension of baby boomers.
Most of his statements align with the general decrease in living standard as explored in this article, such as HELP debt and lack of employment. And let’s not forget housing - with typical properties around 8 times the amount of an annual salary, the Australian dream is more of a nightmare at this stage.
From the looks of it, millenials are having a bit of a tough time. If you are one reading this, chin up, we’re all in this together…. And if you’re a boomer, have a think about giving the kids a break. Maybe you did have it pretty good after all.