Young Australians are barely earning more than their predecessors but are racking up much larger student debts and taking longer to pay them off, new research by the e61 Institute has found.
The analysis of tax return data found that, in 2022 dollars:
Real average incomes for 30-year-olds increased just 6% over a decade, from $59,496 in 2012 to $62,987 in 2022
Meanwhile, the average HELP debt jumped by 45%, from $19,485 to $28,260
The average age of final HELP repayment also rose from 33 in 2012 to 35 in 2022
The percentage of 30-year-olds with a HELP debt increased from 15% to 23%
Year |
Mean real incomes of 30-year-olds |
Avg. HELP Debt of 30-Year-Old with Debt |
% of 30-Year-Olds with HELP Debt |
2012 |
$59,496 |
$19,485 |
15% |
2015 |
$58,405 |
$21,569 |
17% |
2022 |
$62,987 |
$28,260 |
23% |
The population for all of these figures are people who filed a tax return in each year. All are real 2022 dollars. |
|||
"Since the Global Financial Crisis of 2008, the wages of workers under 40 have grown at less than half the rate of older Australians," said e61 Institute Research Economist Matthew Maltman.
"Some explanations include rising underemployment, a shift toward insecure and lower-paying service jobs, award decisions, and an oversupply of workers relative to available high-quality jobs – driven in part by older Australians working longer – which weakened bargaining power and suppressed wage growth.
"Rising employer concentration and a decline in job mobility may also have weakened young workers' ability to climb the job ladder and move into higher-paying positions."
Meanwhile, young people are taking on more student debt which is taking longer to pay off.
"Young people are seeing up to 10 per cent of their income diverted to HELP debt repayments well into their mid-30s, just when many are trying to buy their first home and start a family," said e61 Institute Senior Research Economist Jack Buckley.
The analysis formed part of a report by the e61 Institute titled Will young Australians be better off than past generations?. The report authors suggested that one potential solution to easing the burden on Australians with HELP debts would be to spread their repayments over a longer timeframe.
"Given that university graduates tend to earn more over their lifetimes, the real issue may not be
the size of HELP debts but rather the timing of repayment," said Mr Buckley.
The report also explored young people's economic security, work opportunities, living arrangements, path to independence, and overall well-being.
