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"Cameron Neil" [ Profil ] |
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Pain in the assets: generation Y's lost years
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Nov 4th, 2007 - 19:40:56 |
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i've posted it to our otherwise blog here:
http://ozotherwise.wordpress.com/2007/11/05/consumption-and-
generation-y/
and the project blog
http://www.tigblog.org/group/otherwise/post/275503
so if you want to share this but not send out the full text, you can
cameron
(a note - one of the ... ironic things about this article is that the
advertisement on the SMH website that accompanied it was for a
Hummer.
ha!)
from the article - full text below:
"... there are few hints of a counter-culture among today's young
adults. More than half of the under-30s agree with the statement "I
enjoy clothes shopping," and more than a quarter agree with the
statement "I was born to shop". Almost as many would eat out every
night, if they could afford it. Not surprisingly, they are much more
likely than their elders to go to the cinema, eat out, go to a
nightclub, buy fast food, go to a pub or even visit a music store.
They like to spend their money on travel and technology, particularly
mobile phones, which will come as no surprise to anyone, especially
the phone companies, which are making lots of money out of them. The
Morgan research finds that 91 per cent of the under-30s have mobile
phones (perhaps the more surprising finding is that 9 per cent of
them
do not) and that they spend $54 a month on them, compared with $45
for
30- to 44-year-olds. They also like to buy computers, and plasma and
LCD televisions. And travel."
Pain in the assets: generation Y's lost years
http://www.smh.com.au/news/federal-election-2007-news/gen-ys-lost-
years/2007/11/04/1194117879837.html
November 5, 2007
Young adults are missing out on benefits enjoyed by their
predecessors. Mark Coultan reports.
It's an integral part of being a parent: you make sacrifices to give
your children the best chance to succeed in life. And there is an
expectation that each succeeding generation will take those chances
and be happier, better educated and better off.
But what if the behaviour of one generation - however inadvertent -
caused a new generation to be worse off?
What if today's young adults, the so-called generation Y, were
finding it tougher than their predecessors, generation X, while at
the
same time baby boomers grew ever richer, using their wealth to lock
their children out of the housing market?
That is exactly what appears to be happening. Not only are people
under 30 earning less (in relative terms) than generation Xers did
when they were the same age, astronomical prices mean they are
increasingly locked out of home ownership. They are in danger of
becoming the renting generation.
(There is no clear definition of the label, but generation Y is
vaguely used to define those born in the 1980s and '90s. Baby boomers
are those born between the Second World War and 1961 (sometimes 1964)
and Generation X is the period in between.)
Every week Roy Morgan Research knocks on Australians' doors and asks
questions.
Apart from the well-known questions about who those surveyed would
vote for, the researchers ask a host of other questions: which bank
they use, how big is their mortgage, how much superannuation do they
have?
They have been doing so for years, and not just in Australia. They
also collect data from the United States, Britain, New Zealand and,
in
recent years, Indonesia. The result is a treasure-trove of
information
about the way Australians think and behave, both over time and in
comparison with people overseas.
The researchers have now decided to bring some of this information
together to provide a more accurate picture of trends over a 10-year
period.
Their first report, State of the Nation, focuses on housing
affordability. Right in the middle of an election campaign in which
interest rates are a big issue, and with the Reserve Bank tipped to
raise rates again this week, it is very timely.
The data draws a disturbing picture of Australians under 30 (which,
for the purposes of this story, we will call generation Y). This
generation is doing exactly what everybody says is the right thing:
they are getting a good education.
More Australians than ever are gaining university degrees; up from 15
per cent 10 years ago to 23 per cent today.
But university education delays entry to the workforce, which could
account for the relative drop in income that Morgan found for this
age
group.
While the average income of all Australians has increased by more
than
half in the past eight years, the income of Australians under 30 has
only increased by about 40 per cent. People over 60 had the greatest
rise, with an increase of more than 60 per cent, reflecting people
staying longer in the workforce and the power of their investment
income.
While increased education among younger people is undoubtedly a good
thing, and normally considered a key to increasing income over a
lifetime, Morgan speculates that there may be less of an income
premium attached to higher education than previously, because the
graduates are competing against each other for jobs.
It notes that while part-time and casual work has increased across
all
age groups, it was most pronounced among the under-30s. That makes
sense for people who are still studying, but it may also reflect,
says
Morgan, "increased difficulty in finding stable, long- term
employment."
While their income (relative to everybody else's income) has
declined, at the same time house prices have skyrocketed.
Morgan finds that the value of the average mortgaged home has
increase from $170,000 in 1997 to $434,000. But the value of a home
owned by someone under 30 has not increased by as much as homes owned
by older people, suggesting generation Y has had to settle for
properties of relatively lower value to get into the market.
And while they are buying cheaper houses, they are borrowing more.
Those who have stretched themselves to buy a home owe, on average,
more than $200,000. Generation Xers owe $179,000 and baby boomers owe
$128,000.
The equity that people own in their homes increases as they age, but
the 10-year trend shows while young people own about the same
proportion of their home as they did 10 years ago, older age groups
have benefitted from house price inflation to gain a larger share of
their homes.
Meanwhile, baby boomers continue to strengthen their grip on society,
even as they age. Ten years ago those aged 45 to 59 owned about a
third of the money in bank deposits, managed investments and
superannuation. Today they own 42.6 per cent of those assets.
But generation X has the most debt. Thirty to 44-year-olds, who
represent 27 per cent of the population, have 46.7 per cent of the
credit card and loan debt.
Even here baby boomers are breaking the mould. Where once people in
middle age had paid off their mortgages, these days paying off the
mortgage is a reason to borrow more, for extensions, an investment
property or shares.
Today almost half (49 per cent) of boomers have a home loan, while 10
years ago just over a third of people aged from 45 to 59 did. Even
seniors have not kicked the debt habit, with the proportion of the
over-60s who still have not paid off the mortgage almost doubling to
9
per cent.
But the story is not just about one generation using its purchasing
power to elbow a younger one out of the market.
While members of generation Y have less money than their
predecessors, they like to spend it. In many ways, today's young
people have more in common with the baby boomers than with the
generation between them.
In fact, some commentators have dubbed them the echo boomers. Perhaps
living in a period of low unemployment has given them a similar
outlook on life to those who grew up in the full-employment 1960s,
when a job would be waiting after the obligatory overseas adventure.
But there are few hints of a counter-culture among today's young
adults. More than half of the under-30s agree with the statement "I
enjoy clothes shopping," and more than a quarter agree with the
statement "I was born to shop". Almost as many would eat out every
night, if they could afford it.
Not surprisingly, they are much more likely than their elders to go
to
the cinema, eat out, go to a nightclub, buy fast food, go to a pub or
even visit a music store.
They like to spend their money on travel and technology, particularly
mobile phones, which will come as no surprise to anyone, especially
the phone companies, which are making lots of money out of them.
The Morgan research finds that 91 per cent of the under-30s have
mobile phones (perhaps the more surprising finding is that 9 per cent
of them do not) and that they spend $54 a month on them, compared
with
$45 for 30- to 44-year-olds.
They also like to buy computers, and plasma and LCD televisions. And
travel.
In this respect generation Y is more like the baby boomers when they
were in the bloom of their youth. In fact, today's young want to do
what their parents did in the 1960s: leave the country.
------- End of forwarded message -------++++++++++++++++++++++++++
Join the International Young Professionals Foundation
http://www.iypf.org/membership.htm
++++++++++++++++++++++++++
International Young Professionals Foundation
Cameron Neil Chief Executive Officer
0402 072 452 cameronneil (at) iypf.org
www.iyps.org www.iypf.org
http://profiles.takingitglobal.org/cjneil
http://cjneil.tigblog.org
http://www.linkedin.com/profile?viewProfile=&key=426121
++++++++++++++++++++++++++
"if you want to build a ship, don't gather your people and
ask them to provide wood, prepare tools, assign tasks...
Just call them together and raise in their minds a longing
for the endless sea." -Antoine de Saint-Exupery
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