The Productivity Commission has found Australia's rates of economic mobility rank among the best in the world. Two-thirds of people born between 1972 and 1982 earn more than their parents did at the same age. However, those born after 1990 are experiencing slower income growth and poverty levels are the highest since 2001. Commission Chair, Danielle Wood, says overall levels of economic mobility are high by global standards.
Category
📺
TVTranscript
00:00We've seen really high economic mobility, and what that means is how well their parents
00:07did, whether their parents were low income earners, middle income earners, high income
00:11earners, doesn't actually have much of a bearing on how well they've performed.
00:15And we're actually one of the most economically mobile countries in the world on that measure.
00:21So those are a couple of the, I think, positive news stories to come out of the report.
00:25What we did find, though, the note of caution in that finding was at the extremes you have
00:30much less mobility.
00:31So if you're born into a very high income family at the top 10 per cent, you're more
00:35likely to stay high income.
00:37And the counter to that is if you're born into a poorer family in the bottom 10 per
00:40cent of incomes, you're more likely to stay at a low income level.
00:46So that kind of idea of getting trapped in poverty, we do see some of that in the data,
00:50unfortunately.
00:51So I think it's really important, then, to think about policies that break those cycles.
00:56So things like early learning and care, high quality school education, they're all going
01:01to be superchargers of economic mobility.
01:04The other thing that we know is really important is the way the broader economy is performing
01:10and income growth in the broader economy.
01:13So that is what has led to the fact that the people in the mid-40s have done better than
01:18their parents.
01:19That is less true of those younger millennials, those born in the 1990s, because they've hit
01:24the workforce in a period where wage growth was pretty stagnant pre-COVID, and then post-COVID
01:32we've seen real incomes go backwards.
01:34So really, economic growth matters for living standards.