Younger Australians could face devastating job losses because our approach to bringing down the rising cost of everything – aka inflation – has “unhappy consequences”.
Traditionally, more young people work in retail and, last week, payroll data showed the industry taking a 0.8 per cent hit, which financial expert David Koch said could be a bleak sign of what’s to come for younger generations.
“The [Reserve Bank’s] rate-rise cycle is designed to slow spending, to take the sizzle out of red-hot inflation. An unhappy consequence is that can impact business profitability, and ultimately lead to job losses,” he told Yahoo Finance.
Are you a millennial or Gen-Z struggling to get work? Tell your story to belinda.grantgeary@yahooinc.com
“The worst part is we know many of the affected sectors have a younger workforce, which means – once again – Gen Z and Millennials may be disproportionately impacted.
“It’s a punch in the guts for the generations who had their schooling and uni years marred by the COVID-19 pandemic. Now they’re battling rising costs while trying to get a foot on the career ladder.“
In the year to June, the cost of food was up 7.5 per cent, rent was up 6.7 per cent, utilities jumped up to 14 per cent, according to data from the Australian Bureau of Statistics (ABS).
This hits most Aussie households hard, however, many young people don’t have the financial safety net of property ownership or haven’t had the chance to be working long enough to amass a healthy savings buffer.
Being newer to the workforce, they can be paid less and be in insecure jobs. Young people are also more likely to be renting in a market where asking prices have reached record highs.
Young Australians, renters, mortgage holders and parents were identified by Finder’s Cost of Living Report as those suffering the most under rising inflation.
“Higher vulnerability from their lower savings has led to over half (56 per cent) of younger Australians (Gen Z) feeling financially pressured to look for a second job in 2023 and 90 per cent of Gen Z reporting reduced spending,” Finder said.
More than one in two said they experienced financial stress but it was younger Aussies and women struggling the most.
What per cent of each Aussie generation are feeling financial stress?
Koch said the implementation of monetary policy to drive down inflation was a “tricky balance”, particularly while trying to avoid a recession, which would have far-ranging consequences.
The Reserve Bank (RBA) has predicted the unemployment rate will jump to 4.5 per cent by mid-2025.
“The RBA will be watching carefully to make sure any economic slowdown does not teeter into difficult territory, as mass job cuts could be devastating for tens of thousands of families,” Compare The Market’s economic director said.
We will get more insight on how many Aussies are losing their jobs on Thursday when the ABS September labour force report comes out.
The jobless rate, while higher, has still remained low historically, holding at 3.7 per cent in July and August.
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