Australian households are facing shrinking incomes (and other bad news)
Financial Planning | 28/03/2017 |
4 min read
ME Bank has released the findings from their latest Household Financial Comfort Report.
Based on 1,500 responses, the report provides in-depth insights into the financial psychology of Australians.
Unfortunately, the findings are downcast:
• Over a quarter of households experienced an income cut during 2016.
• Lower confidence in job security and availability are leading drivers of income stress, with wages either stagnating or dropping.
• Under employment is an ongoing problem, with 60% of part-time employees wanting to ‘increase the hours they work’
• Where incomes have risen, they’re much more likely to be among high income earners, creating a growing divide between rich and poor.
According to ME consulting economist and report co-author, Jeff Oughton, the move away from mining and manufacturing jobs has seen many workers leaving well-paid long term employment for casual and contract work at significantly reduced rates. This is having a knock-on effect throughout the economy.
"ABS data shows wage growth at historical lows over the past two years to the September quarter. ME's report supports this, highlighting low wage growth continued in the whole of 2016 and is causing financial discomfort for many households, exacerbated by job insecurity and underemployment," Mr Oughton said.
Wage growth and under employment may be ongoing issues, but understanding your options can help you plan for the future. Speak to an Equip financial planner to learn more.
You can download the full report from ME Bank.