The largest and most detailed ongoing study of Australians paints a picture of a country where the young are losing out to older generations in the wealth race, and the once rapidly growing pie appears to be on the verge of shrinking.
The clear message from the latest iteration of the massive Household, Income and Labour Dynamics in Australia (HILDA) survey is that the boom times are over and that those who made a killing from rising asset prices are nicely set up, but it looks tougher for the rest.
And many of us are losing sleep.
“What HILDA highlights is the new reality in which that the boom is over, household income isn’t growing and government expenditure is outpacing tax revenue,” says the University of Melbourne’s Professor Roger Wilkins, who has overseen the survey.
“This is the new reality that politicians are having a tough time communicating to people and which I think is at the root of much of the political instability we have seen over the last six years or so.”
These results are based on the average data from the HILDA Survey of interview respondents who have the same gender, age and educational attainment as you. The HILDA Survey contains 17,000 respondents annually.
HILDA is a stunningly unique snapshot of Australia that goes well beyond the usual statistics. Managed by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, it covers how wealthy we are, how satisfied we are, how much superannuation we have, how much exercise we are doing, what we are eating, how much sleep we are getting, and how our relationships, gender and sexuality are all affecting our life chances.
Since 2001 the survey has been following the same 17,000 people and is growing as their children and grandchildren start to participate. It means researchers can chart the life-courses of people, rather than just broad numbers, enabling them to measure the persistence and recurrence of issues like poverty and unemployment, to better understand their causes.
And for the first time HILDA this year gets behind the extent of material poverty by measuring what basic items most of us would regard as essential are being foregone by significant numbers of people. For example, over 12 per cent of households don’t have $500 in savings for an emergency, and nearly 7 per cent of households with school-age children can’t afford new school clothes every year.
The most materially deprived among us tend to be single mothers and Aboriginals. The low-income elderly appear to be less materially deprived than their income may suggest because they may own their own home or have other assets to call on.
“This new approach in HILDA seeks to identify those who are unable to afford the items that are widely regarded as necessary or essential to achieve an acceptably minimal standard of living,” says Professor Peter Saunders at the Social Policy Research Centre at the University of New South Wales, who led the development of the new measure. “It will help us to better understand the factors that give rise to deprivation and help people to escape from it.”
The 2014 iteration of HILDA highlights declining rates of home ownership as younger people are being priced out of the market and those that are buying into the market are taking on increasing levels of debt. The proportion of adults owning their home has fallen from 57 per cent in 2002 to 52 per cent. The proportion of people in over their heads, that is they owe more on their homes than the home is worth, has blown out to 3.4 per cent from 1.6 per cent back in 2002.
Professor Wilkins says the decline in home ownership is worrying and demands policy attention. He warns that home ownership in a society like ours, where renters are given little security, is a key barometer of the health of a society. “Home owners tend to be more invested in their local community, and declining home ownership is likely to have adverse social consequences,” Professor Wilkins says.
HILDA also makes clear that the big wealth gains are behind us. Between 2002 and 2014 HILDA suggests median household wealth grew by an average 37 per cent, but all this gain was in the period 2002-06 when asset prices were on the rise. Since 2006 the growth in household wealth has stalled and on median has risen by just 1.4 per cent. The mean, or average, household wealth has actually fallen by 1.2 per cent since 2006.
“Even though house prices have continued to go up since 2006, that has been offset by declining home ownership, rising indebtedness and a weak share market,” says Professor Wilkins.
The survey also reveals that the gap between the wealthiest and the rest has grown. Those households wealthier than the 99 per cent of the rest of us have enjoyed a 117 per cent rise in wealth.
The biggest winners by far in the wealth race have been the 65 year-olds and older. Their wealth is up by 61 per cent since 2002 and has now overtaken the stalling wealth of 45-54 year-olds. It isn’t surprising that older groups have more wealth, but the table below makes clear that older Australians are benefitting from significantly higher growth than younger cohorts.
HILDA also delves beyond what we have and don’t have, to examine how we are living. When it comes to exercise, men are doing more of it than women, and for people with children it is the mother who gives up time for exercise. Fathers are out pounding the pavement or at the gym as much as their childless fellows. And in what looks like compensatory behaviour, men who smoke and are comparatively heavy drinkers also exercise more.
This latest iteration of HILDA has also asked participants about how much and how well they are sleeping in what is the first ever large-scale national sleep survey. And the results aren’t good. About 20 per cent of 35-64 year olds report sleeping less than six hours are a day, which the Australian Sleep Health Foundation warns is inadequate.
Some 16 per cent of males and 18 per cent of women aren’t getting enough sleep. Many are also reporting poor quality sleep marked, for example, by trouble getting to sleep or waking up too early. Nearly 27 per cent of females and 22 per cent of males report “fairly bad” to “very bad” sleep.
The survey also confirms that getting a good night’s sleep really does matter. Poor quality sleep was highly correlated with poorer health and lower self-reported mental health and life satisfaction.
Unsurprisingly, people with children under two years of age report the least and poorest quality sleep. Mothers are bearing most of the sleep deprivation with the negative effect of young children on sleep three times worse for mothers than it is for fathers. But having a partner around to help does make a difference. Single mothers with young children fare much worse, getting more than one hour less sleep a night than a partnered mother.
Banner image: University of Melbourne.