Should Gen Y be worried about their future?
Katie Acheson, Australian Youth Affairs Coalition says yes:
For the first time in our history, young Australians are experiencing a lower standard of living than their parents. And, unlike their parents, Gen Y does not have the assurance that if they work hard, finish school, get a job and buy a house, they will have established a secure foundation to build their economic future.
Our nation's youth unemployment rate is now the highest it has been since the mid-1990s. In terms of buying a house, in 1975 a Sydney home buyer took three years on average to save their deposit, and a home cost four times their annual income on average. In 2015, a Sydney home buyer took nine years on average to save their deposit, and a home cost 12 times their annual income on average.
There's no denying the landscape has changed. Disruptive technologies have revolutionised the workforce and, while this provides opportunities, our education system is struggling to keep pace and adequately prepare the next generation for the careers they can expect in the next decade.Gen Y should be worried because they have inherited a legacy of generational and systemic inequality.
Mark McCrindle, McCrindle Research says no:
While Gen Ys are faced with high house prices, in a context of slow wages growth and significant student debt, there are more factors in their favour than against. They are twice as likely to have a university degree, they are commencing their careers in a time of an ageing workforce with emerging opportunities and - from superannuation to the savings benefit of being able to stay in the parental home longer - they have more financial supports than any previous generation.
While they have technology costs that their parents didn't have, most food, furniture and clothing are cheaper in real terms, and both interest rates and taxes are lower today than for the previous two generations.
Gen Y are a well-educated, technologically savvy, globally connected cohort just entering their wealth-accumulating years at a time of a stable - if not stellar - economy. Yes, they could more intentionally follow the pathway of the previous generations and cut back on lifestyle spending and put more into assets that will grow.
But don't worry - the kids will be fine. And if all else fails, as back-up they have the highest net-worth generation ever - their parents.