Nine.Finance: "The gap between Australia's one percenters and the nation's working poor has widened with pay cuts and job uncertainty crippling the financial comfort of low-income households." This is not news but nice to see mainstream media convering it. Graphic from the excellent McCrindle blog.
‘The rich appear to be getting richer, while the rest of Australia is struggling – there’s a divide across households’
Findings from a ME household report, released today, revealed more than a quarter of households, or 27 percent, experienced a drop in pay in 2016.
The report found "comfort with income" among low socio-economic households remains at 5.55 out of 10 - the lowest level since the report began six years ago.
"Only 32 percent of households reported ‘income gains’ over the past year – one of the lowest levels since the first survey in 2011," ME consulting economist and report co-author, Jeff Oughton, said.
"(This is) down from the corresponding figure of 38 percent 12 months ago."
Mr Oughton said income gains were more likely to be reported by those with higher incomes and wealthier Australians.
Almost one in two, or 46 percent of households with incomes over $100,000 reported ‘income gains’, compared to 17 percent of households earning under $40,000, the report found.
It also revealed 41 percent of households earning less than $40,000 reported income losses, compared to only 13 percent of those earning over $100,000.
It found single parents are "doing it the toughest", with this segment reporting the lowest levels of financial comfort at 4.34 out of 10 – a 3 percent decrease in the six months to December 2016.
Generation X also reported the lowest level of financial comfort on record, down 5 percent to 4.92 out of 10. The financial comfort of retirees on the other hand rose by 8 percent to 6.23 out of 10.
Meanwhile, households earning an annual income above $200,000 reported very high overall financial comfort of 7.10 out of 10 in December. This compared with ME’s overall household financial comfort index of 5.41 out of 10.
"The rich appear to be getting richer, while the rest of Australia is struggling – there’s a divide across households," Oughton said.
"We’re seeing a shift in the composition of jobs as the economy moves away from mining and manufacturing with many employees leaving longer-term jobs and taking up lower-paying less-permanent jobs, which is having a negative impact on their financial comfort."
Quoting data from the Australian Bureau of Statistics, he said wage growth has been at historical lows over the past two years.
He said this was exacerbated by job insecurity and underemployment, with one in three Australian households, or a record 34 percent, reported "job insecurity".
Despite Australia’s relatively low official unemployment rate of 5.8 percent as at December, the report found 60 percent of part-time employees would like to "increase the hours they work" and 70 percent of casual workers want to "change from casual to permanent employment".
The ME Household Financial Comfort Report is based on a survey of 1,500 Australians conducted by DBM Consultants in December 2016.
Read more at Finance.Nine.com.au
Image credit: McCrindle blog