Australian millennials in financial strife despite strong economic growth

Young professionals are still finding the going tough ‘Down Under’.

In the third quarter of 2018, the Australian economy grew by 0.9%, stronger than the previous 0.7% forecast. The nation’s annual growth rate has reached 3.4% which will be music to the ears of the Reserve Bank and Treasury.

New treasurer, Josh Frydenberg confirmed that these figures equate to “the strongest growth since the height of the mining boom in 2012”. Mr. Frydenberg said that with the fundamentals looking “good”, the Australian economy is looking “strong” with continued momentum.

But despite the positivity surrounding the economy overall, recent studies have shown that millennial professionals ‘Down Under’ are still struggling to meet their monthly financial commitments such as credit card repayments and utility bills.

Employment Hero recently commissioned a survey of 1,000 full-time and part-time working millennials on their work, work-life balance and financial situation. The majority (52%) said they face an ongoing battle to keep up with their debts. As a result, more than 2.5 million millennials are said to have sought a payday loan arrangement to keep them ticking over.

These figures have led to Employment Hero’s founder and CEO, Ben Thompson expressing grave concern about Australia’s wage price index falling steadily in the last decade. Thompson said that the declining index is “impacting directly on employees’ standards of living”. It seems somewhat surprising that wages have managed to fall despite the economy thriving.

Employment Hero’s survey coincided with their launch of a new suite of employee tools, built to make work life easier for young professionals and their employers too. The WorkLife software is built to find simple ways to encourage workers to save money each week, making their pay check go further. The new InstaPay system is also geared towards helping millennials under financial pressure throughout the month get their hands on advances from their employers up to $250 per week ahead of their chosen payday.

A recent analysis of inequality in Australia by the Productivity Commission has found that millennial professionals aged 15 to 24 and 25 to 34 are receiving smaller wage rises than their older colleagues. It’s one of the main reasons why the majority of millennials would consider turning to a short-term loan, regardless of their credit rating and repayment history.

Despite the financial struggles that young professionals are experiencing throughout Australia, many look to non-financial workplace benefits to solve the pay gap. Although wages remain an influential factor in choosing new jobs, over one million millennial workers admitted they would consider quitting their current job if they could get better workplace benefits elsewhere. The most popular emerging workplace benefits include contributions towards fuel, groceries and gym memberships.

Workplace wellbeing is also firmly on the agenda for millennials who are striving for that optimal work-life balance.

Internal procedures that take employee wellness into consideration appeal hugely to young professionals. Recruiter, Robert Half also conducted a recent survey which found that more than four-fifths (84%) of workers would be content with a smaller wage if it meant they received the non-financial workplace benefits they desired.

Flexible working (47%) was ranked as the most valuable workplace benefit, with Andrew Morris, Director, Robert Half Australia indicating more people in 2018 tend to “thrive in a flexible and transparent workplace with open lines of communication”.