Working a full-time job and earning a decent income are no longer safeguards against experiencing severe forms of financial distress, including food insecurity and even poverty, experts warn.
Australia’s worsening cost-of-living crisis and a severe housing shortage have pushed millions of households to the brink in recent years, with little relief in sight.
As well as the expected cohorts finding things especially tough of late, crisis support services are being inundated by people with full-time jobs who can’t manage to put food on the table or a roof over their heads – a phenomenon known as ‘the working poor’.
That’s the scenario facing a Brisbane woman, who shared her fears about navigating the year ahead on a finance forum on Reddit.
The 41-year-old is single, has no kids, earns $62,000 a year and rents her home and should be able to get by without too much stress; if not for the current economic conditions ravaging the country.
“I’m so disheartened,” she wrote. “It’s the most I [have] ever made and now it’s barley enough. I’ve scaled back my hobbies. I’m trying to work every extra shift.”
According to the Australian Bureau of Statistics, the median income declared in the 2020-21 financial year was $54,890 gross.
Despite earning above that figure, the woman said she’s scared about how she’s “going to afford the next 12 months” – particularly housing.
She needs to start looking for a new rental and fears the horror conditions that await her, revealing a friend recently got knocked back because “the agent got 400 applications”.
Few places to go
The woman’s fears about finding a home to rent aren’t unfounded, with Brisbane’s rental vacancy rate, that is, the proportion of all leased homes currently available, sits at just one per cent.
Things are just as tight in most other cities, and the scenario in regional areas is particularly bleak.
At the same time, prices across virtually the entire country have risen sharply. In the past year alone, rents leapt 13.4 per cent in Sydney, 14.8 per cent in Melbourne, 10.9 per cent in Brisbane, 18.6 per cent in Perth, and 14.2 per cent in Adelaide.
Those working for homelessness services on the ground say the housing crisis is pushing more and more people into insecure positions.
Analysis released today by Homelessness NSW shows an increase in the number of people without somewhere to live across the state over the past year.
Newly released figures from the Australian Institute of Health and Welfare found the number of people accessing services has increased in 58 of the state’s 128 local government areas.
Among the worst hit are Inner West Council, Canterbury-Bankstown, Penrith, and City of Sydney.
Reverend Stu Campbell is the chief executive of Wesley Mission and described housing as a “justice issue” that needs to be urgently addressed.
“There are 200,000 households in Australia registered on social housing waiting lists and Census-informed evidence suggests double that number either homeless or living in unaffordable or unsuitable housing,” Rev Campbell said.
While governments spend about $8 million a year on social housing subsidies, rent assistant payments and homelessness services, it splashes almost $13 billion on homebuyer supports, like purchaser grants.
Negative gearing concessions and capital gains tax discounts overwhelmingly benefit the top 10 per cent income earners, Rev Campbell pointed out.
“This imbalance distorts the housing system and perpetuates a cycle of continually rising housing prices with more and more Australians pushed to the margins,” he said.
“Governments of all stripes have lacked the political will to make the necessary policy changes to arrest the overheated private housing market for fear of electoral backlash from those who have benefited from it the most.”
Last year, the Australian Council of Social Services and researchers from UNSW Sydney released a report probing the causes of poverty and found housing costs are a major driver.
Take Sydney, where the median house rent sits at a whopping $1037 per week and the median unit rent is $694 per week.
The latest figures show one-in-eight Aussies – including one-in-six children – live below the poverty line, deemed to be 50 per cent or less of the median household income ($489 per week for a single and $1027 per week for a couple).
That equates to some three million Australians, the charity Mission Australia estimates.
Many can’t afford to eat
Research by the leading not-for-profit Foodbank puts the consequences of the ongoing cost-of-living crisis into stark context.
The Foodbank Hunter Report for 2023 found 3.7 million households experienced food insecurity over the past 12 months, which is when someone lacks regular access to safe and nutritious meals.
The charity’s chief executive Brianna Casey said a number of Aussies are experiencing food insecurity for the first time, and despite how urgent and precarious their circumstances are, many are reluctant to ask for help.
“It’s clear the cost-of-living crisis is exacerbating the challenges facing those in vulnerable circumstances, and forcing people to make compromises on what and when they are eating,” Ms Casey said.
The Foodbank report found 94 per cent of those battling cost-of-living pressures have cut their spending on groceries.
“Food insecurity is waking early and sending your child off to school with a rumbling tummy and empty lunch box because you’ve been forced into an impossible choice between paying the rent or buying food that week,” Ms Casey said.
“Food insecurity is living at home alone as a pensioner, convincing yourself that three meals a day is a luxury, and that two – or even one – will suffice.
“Food insecurity is rushing to the fruit platter at a working lunch in the office because fresh fruit and vegetables have become a treat, rather than a dietary staple.
“Food insecurity is now having a mortgage, a full-time job and a side hustle, yet food is a discretionary spend in the household budget.
“I wish these were hypothetical examples. They’re not.”
Everything costs more
Red-hot inflation has seen the cost of virtually all goods and services skyrocket over the past few years, from utilities to petrol and groceries.
Anger over the role alleged price-gouging has played has been bubbling away for several months, but reached fever pitch last week.
A comprehensive government review into pricing across major industries, particularly the supermarket sector, was released by Professor Allan Fels.
”It confirms what many Australians have long suspected – that excessive corporate profits and monopolistic practices are contributing significantly to the cost of living crisis and undermining our social fabric,” Greens Senator Nick McKim said.
Among those industries identified by the review as partaking in price-gouging are supermarkets, banks, early childhood, aviation and electricity.
Tough conditions for millions
The fact Aussies on full-time wages are struggling is something that demands urgent action from policymakers, advocates say.
Sally McManus, secretary of the Australian Council of Trade Unions, said the lowest-paid workers are copping the brunt of the cost-of-living crisis.
“Unions have won the biggest increases in the minimum wage in a generation, with a 14.3 per cent pay boost for minimum wage workers over the last two years, higher than the 7.4 per cent growth in overall wages,” Ms McManus said.
“However, too many big businesses have added to inflation by price gouging, and this has meant that the lowest-paid workers have been hit the hardest.
“More needs to be done to reach the point of a living wage so a full-time minimum wage worker can live a life of dignity, and we are not there yet.”
The post on Reddit sparked a flood of comments from Australians in similarly precarious positions, with plenty saying their good salaries don’t go far enough.
A 28-year-old man from Sydney who earns up to $120,000 with overtime, saying “I don’t know how people can survive and plan so well without living frugally all the damn time”.
“When I was a little younger, I thought $70,000 was a very good salary, but damn, times have changed,” he wrote.
“I feel $100,000 barely brings you up to spec to survive during this time. It’s not a great time to be an adult.”
Another described their situation as “far from ideal”, writing: “Full-time job, side hustles, no time off, no travel and car is from 1998, but hey I am paying my bills and my rent (until I get booted and have to pay an extra $200 a week or 6 months upfront to avoid moving into a caravan park).”
Others were surprised by the examples, saying they were faring well on similar incomes – or less – and with more financial responsibilities.
“I’m on around 58k with 5 children (12-24) at home,” one said. “It’s not as tough as it probably should be but I am good with minimal money. It does worry me that I couldn’t get another rental let alone ever buy a house but I want to try.”
Another wrote: “I make less and support a whole family, have a go!”