The farfetched aim to get rich quick is more a fantasy that ever for Generation Y and Z.
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Though persistently chided by older generations as being lazy, unambitious, selfish and scattered, these labels conveniently ignore next to no income growth and limited wealth-generating opportunities for many.
A McKinsey Global Institute report released this month with the foreboding title Poorer than their parents? revealed that more than 60 per cent of households in 25 advanced economies either experience stagnating or falling incomes between 2005 and 2014.
I suppose most of us will have to settle for being taller than our parents instead.
Australian Bureau of Statistics data shows that wage growth has halved over the past four years.
And it grew just 0.4 per cent over the March quarter; the lowest increase in 18 years.
With house prices going rapidly in the other direction, sharemarkets volatile, and interest rates low, it’s no wonder 20 and 30-somethings would rather spend their earnings on cheap overseas trips than investing in, and saving for, their future.
Young generations shouldn’t blame their poor fiscal outlook on older generations but it would be helpful for Baby Boomers to acknowledge that the young’uns are not benefiting from the big gains from investment decisions and flush pay rises relative to living costs.
The depressing report also revealed that in order for Australia to meet its future pension and retiree healthcare obligations, public expenses would need to be cut by 32 percent or taxes increased by 28 percent by 2050.
This combined will mean less disposable incomes for the working-age population and a more costly retirement.
Fantastic.
- MATT MALONEY