Australia is the land of the fair go, according to the Productivity Commission, with most people able to get ahead based on their talents and available opportunities and able to earn more than their parents. Source: SMH.
But at the extreme ends of the income spectrum – the very poor and the very wealthy – people are less likely to move up or down the income mobility ladder, and there are early signs that the generation-on-generation income growth enjoyed by millions of Australians is stagnating.
The Productivity Commission report on economic mobility in Australia found that about two-thirds of “Xennials” – Gen Xers and Millennials born in the late 1970s to early 1980s – were earning more than their parents did at a similar age.
Productivity Commission chair Danielle Wood said economic mobility was important because it meant people’s hard work and talent determined their life outcomes rather than how well their parents did.
The research found Australia had relatively high economic mobility compared with peer countries, including the UK and the US.
One critical factor helping Australians earn more than generations past was education.
Long-term economic growth has also been key to helping each generation earn more than before, Ms Wood said.
While most people end up in the big movable middle, Ms Wood said people at the extreme ends of the income spectrum were less likely to be mobile.
She said many people end up in poverty temporarily, but some get stuck in a poverty cycle, with renters, people with poor health or those living in poor areas, women or older people more at risk. The report found that poverty could be inherited.
At the opposite end of the spectrum, people whose parents were in the top income bracket were more likely to remain there, and wealth – more than income – kept younger generations in the top brackets.
FULL STORY
Gen X, Millennial Australians better off than their parents – but not all (By Rachel Clun, SMH)
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Worrying signs emerge from new economic mobility report (ABC News)
