Economic inequality has reached a high not seen in more than 20 years, according to the latest report from the Household, Income and Labour Dynamics in Australia (HILDA) Survey.
The report details how the Australian economy has shifted in the wake of the COVID-19 pandemic, with pressures such as increased time spent working, damage from weather-related events and the impact of problem gambling affecting Australians across the country.
Now in its 19th iteration, the annual report uses data collected over more than two decades, with the same 17,000 people interviewed year-on-year.
This longitudinal study allows the Department of Social Services, the Melbourne Institute and the University of Melbourne to assess how Australian life has changed across two decades, studying everything from economic wellbeing to our family and social lives, our financial decisions, health and levels of community engagement.
"This report includes analysis of survey results collected between 2001 and 2022," said lead author and Co-Director of the HILDA Survey, Professor Roger Wilkins. "This breadth of data allows us to understand how economic factors have changed in the early part of the century, through the height of the COVID-19 pandemic, and in the years following. The survey looks at many aspects of life, which helps us understand everything from which groups of Australians were most affected by growing inequality and the damage from extreme weather events, to whether we're owning more pets, and which personal finance habits help individuals grow their wealth."
Inequality at a 20-year high
Inequality in Australia is at its highest since the HILDA Survey started in 2001, this year's report shows.
While the economic support offered to Australians during the COVID-19 pandemic contributed to reduced inequality in 2020, the following two years saw a significant increase. In 2022, the Gini coefficient, a common measure of overall inequality, rose above 0.31 for the first time in the survey's history.
The Gini index represents a scale between complete equality and complete inequality. If every citizen earned the same amount, that country would have a coefficient of 0. If all of the money was earned by one person, it'd be measured as a 1.
Consistent with this, more than half (51.2%) of survey respondents reported that their real income decreased between 2021 and 2022.
"After the initial effect of the pandemic, higher incomes in Australia have grown faster relative to middle incomes. At the same time, the relative growth of lower incomes has declined, which drives inequality up and makes it harder for poorer Australians to move into higher income groups," said Professor Wilkins.
Men still not picking up the housework
Australian men are not doing any more housework than they were 20 years ago, with women spending almost two hours more in paid or unpaid work than men throughout a typical week.
In 2022, men spent an average of 12.8 hours on housework, which is the same amount of time as they were spending in 2002.
The analysis found both men and women are spending more time in paid work than they were 20 years ago. Women in 2022 averaged 28.5 hours a week in employment (compared to 22.2 hours in 2002) while men spent 37.9 hours (up from 37.7 in 2002).
On average, men are spending 30 minutes a week more caring for children or loved ones (5.5 hours a week in 2022, up from 5 hours in 2002), while women spend 10.7 hours a week caring in 2022, an increase on the 10.1 hours spent in 2002.
"We found that women take over a greater share of housework and care than their male partner in almost every employment scenario," said report author Dr Inga Lass. "While women do significantly more paid work than they used to, this divide of unpaid work at home has not changed significantly since we started measuring in 2002.
"The survey also allows us to see that men are overall more satisfied than women are with the current division of unpaid work around the house. Most women feel that they do more than their fair share at home, whereas men usually believe they share the housework and care fairly with their partner."
Problem gambling on the rise
The risk of problem gambling is increasing in Australia at every severity level, with 12.9% of surveyed men being classified as "at-risk" gamblers.
Compared to 2018, sports betting was the only type of gambling activity that increased in prevalence in 2022. In relative terms, the seven-year period between 2015 and 2022 saw a 66% increase in the proportion of men involved in sports betting.
Fewer people in Australia are betting with poker machines, but those that are using them are spending significantly more than they were seven years ago. Women that use poker machines spend an average of $284.96 a month gambling on them, with men spending $208.65. These figures set poker machines far ahead of other types of gambling when considering mean monthly expenditure.
The three habits that help accumulate wealth
The longitudinal nature of the survey allows analysis of personal financial practices and their association with wealth accumulation.
Three factors were found to be associated with greater wealth accumulation – regular savings habits, a longer savings horizon, and greater preparedness to take financial risks.
Being a smoker was found to reduce wealth accumulation over a four-year period by $90,400, but the same effect was not observed for the regular consumption of alcohol.
Single parents hit the hardest by negative outcomes
Across the broad spectrum of the survey and the report's analysis, single parents are often the demographic that is the most negatively impacted by economic factors.
Single parents have seen a 76% increase in child care costs per child since 2006, compared to a 48% increase for couple parents.
Over the 2001-2022 period, single parents were not only the most likely family type to have poor mental health but also took the longest to recover from poor mental health.
With a poverty rate of 25%, single-parent families were significantly more likely to experience poverty, more than four times the rate for couple-parent families (6.2%). They also had the lowest average wealth levels.
Floods across Australia cause spike in household damage
In 2022, the percentage of Australians that reported weather-related damage to their house reached a level not seen before in the HILDA survey.
Since 2009, the annual survey has asked participants whether "a weather-related disaster (e.g., flood, bushfire, cyclone)" had damaged or destroyed their home in the last 12 months. The 2022 results therefore included respondents impacted by the various floods across Queensland, New South Wales, Tasmania and Victoria during late 2021 and 2022.
As such, this latest wave saw much larger rates of home damage from weather-related disasters, jumping from 1.3% in 2021, to 4.5% the following year. This eclipses any rate seen before, almost 2 percentage points higher than the previous nationwide peak of 2.7% in 2011. This recent rise in weather damage hit those in the northeast of the country the most, with roughly 9% of respondents in New South Wales and 6% of Queenslanders affected.
The HILDA Survey follows the story of the same group of Australians over the course of their lives. Launched in 2001, it now tracks more than 20,000 people (including children) in 9,000 households and grows as families expand.
The HILDA Survey collects information annually on a wide range of aspects of life in Australia, including household and family relationships, childcare, employment, education, income, expenditure, health and wellbeing, attitudes and values on a variety of subjects, and various life events and experiences.
It is funded by the Australian Government Department of Social Services and is managed by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne.
This report was authored by:
- Professor Roger Wilkins, Deputy Director of the Melbourne Institute of Applied Economic and Social Research and Co-Director of the HILDA Survey Project
- Dr Ferdi Botha, Senior Research Fellow, Melbourne Institute of Applied Economic and Social Research
- Dr Inga Lass, Senior Research Fellow, Melbourne Institute of Applied Economic and Social Research
- Dr Kyle Peyton, Senior Research Fellow, Melbourne Institute of Applied Economic and Social Research
For the full report go here.
