By Sonia Arakkal
Millennials entered the workforce in the turmoil of a recession. Now, just as we are finding our feet, realising our career potential, and starting our own families, we are being brought to our knees. There’s the idea of a generational bargain — an implicit contract between generations to help their elders and those who come next. The COVID-19 pandemic has brought the generational bargain into focus. As a society we have asked a generation of young, working age people to put their dreams on hold, to slow the progress of a virus that’s more likely to seriously affect older Australians. Meanwhile, the sectors hardest hit by the government’s shutdown disproportionately affect young people and, unlike the Baby Boomer generation, Millennials do not have the asset base to weather this storm. Economists at the Grattan Institute have found that households headed by someone aged 65-74 have an average equivalised net wealth of $1 million today, up from about $600,000 just 12 years ago. Meanwhile, younger households have made barely any gains compared to a household of the same age 12 years ago. We are giving up our freedoms, having our wages lowered, losing our jobs — all for the lives of a generation outraged at the thought of losing their precious franking credits. In good news, the government has effectively doubled the Job Seeker payment and tried to keep people in jobs with the Job Keeper scheme. The effectiveness of these measures will depend on how quickly payment claims are processed and whether employers act on the objectives of the scheme. This could take months. In the meantime, rent has to be paid. Around 60% of 25- to 34-year-old households in Sydney and Melbourne rent. Millennials are more likely to be casual workers employed by industries that have closed. The biggest challenge for many young people in the coming weeks will be keeping a roof over their heads. When it comes to keeping a roof over our heads, there has been no shortage of advice. We have been shouted at to give up avocado toast, to borrow from the bank of Mum and Dad, and now to stay isolated in cramped share houses we don’t own and pay the rent with money many can no longer make. The home has always been a symbol of safety and security, even more so during the time of pandemic. But for millennials, the home symbolises precarious debt, unattainability and a different address every year. The recently announced moratorium on evictions is a stop-gap measure which doesn’t go far enough to protect renters. We are leaving them at the mercy of landlords. In the short-term, government must step in or help landlords and banks to bear the risk rather than pushing the financial risk onto the young or vulnerable. Allowing young people to access their superannuation to pay rent is irresponsible. Modelling has found people in their 20s who take full advantage of the government's early access scheme could lose between $58,000 and $84,800 in savings by retirement age. So why aren’t governments acting in the best interests of young people by protecting renters? When it comes to economic policy - from negative gearing to franking credits - successive governments have chased the grey vote. This economic stimulus is no different. For example, in the government’s first round of stimulus, the first cab off the rank was payments to pensioners and self-funded retirees even though, as noted by Grattan economist Brendan Coates, pensioners are the most insulated from the economic disruption of the pandemic. On the other side of this, I hope Millennials can proudly say we upheld our end of the bargain - that we stayed home and saved lives. I also hope we develop a generational consciousness and ensure the other side of the bargain is upheld. What does that look like? It looks like winding back age-based tax breaks for older Australians and diversifying our tax revenue so that young working people aren’t bearing the brunt of the significant debt that the government will be looking to pay down.
Many young people will benefit from this stimulus but we can’t be the only ones to pay it back, nor can we mortgage our children’s future on it.
It looks like changes to planning rules to encourage higher-density living in established city suburbs to make housing more affordable.
It looks like acting on climate change policy. As we are sacrificing to save their lives, older Australians must be willing to sacrifice to save the lives of future Australians from the climate crisis.
For now, we stay at home, even though for millennials, home is where the heartache is.