In middle Australia, rosy wealth data can hide a world of pain

Photograph: James Ross/EPA

Boosted incomes pre-pandemic haven’t been able to dent the effects of inequality, poverty and casualisation

The latest Household, Income and Labour Dynamics in Australia (Hilda) survey, released on Tuesday, shows that while incomes received a boost prior to the pandemic, inequality remains little changed, poverty is on the rise and the casualisation of work is becoming endemic.

The Hilda survey tracks more than 17,500 people in 9,500 households and has been running since 2001. It provides a unique insight into how lives have changed over the course of this century across a wide range of social and economic factors.

The survey, importantly, gives us an annual figure for median household income (as well as the wealthy in the 90th percentile and those in the 10th percentile). This is valuable to counter the times when politicians seek to suggest “average income” is somehow “middle Australia”.

Related: These are strange economic times. Some measures look horrific, but others are booming | Greg Jericho

If you want to talk about middle Australia, you need to talk about the median household income – ie the level at which half earn more and half earn less.

In 2019, median household income grew quite strongly compared with the lean years after the GFC:

As I observed at the time this is largely because that was the year of the government’s first lot of tax cuts.

The latest survey estimates that in 2019 the median “equivalised” household income was $52,900.

This figure is the income of a single-person household at the median level of living standards. To adjust this amount for different household sizes we add an extra 50% per adult and 30% per child.

Thus in 2019 the median disposable income for a family of four was $111,090:

Because this is after tax, it is tough to estimate the median gross income for households.

But if we assume a 60:40 income split for couples, we can estimate that a median income family of four needed a gross household income of $136,400, while a single person needed to earn $64,300:

It is worth noting that in 2019 average male weekly full-time earnings was equivalent to $95,732 annual income, and for women it was $79,554.

So a couple on average full-time earnings in 2019 would have had a pre-tax income of $175,286 – well above the median level for all families of up to three children.

But while these numbers are helpful for fact-checking politicians talking about “middle Australia”, where the Hilda survey really comes into its own is looking at changes over time.

The survey finds that in each of the three years from 2017 to 2019 the percentage of households in poverty rose.

The survey notes that poverty levels fell “between 2007 and 2016, from 13.2% of the population to 9.8%, but by 2019 it had risen to 11.3%.

The survey also found a significant increase in the casualisation of labour.

While the overall percentage of workers who are casual has actually fallen, this is mostly because older workers make up a greater share of the workforce than in the past and they are less likely to be casual.

But workers under 35 are more likely to be casually employed than earlier this century:

The survey also finds that the average hourly rate for casual workers has risen much more slowly than for other workers:

But as employers have shifted to employing these (cheaper) casual workers, the average hours worked by casuals has increased, while the average hours worked by others has fallen:

What this also reflects is that casual work is becoming more ingrained than in the past.

At the beginning of this century, around 42% of casual workers would be in a permanent job within four years. Now it is down to 36%:

Similarly, while new young entrants into the workforce are on average older and more educated than in the past, they are also less likely to be entering into a full-time job – regardless of their qualifications:

The survey also finds that individual contracts are now more common than they were in 2008 under WorkChoices:

Both the government and the opposition will find things in the Hilda survey to trumpet and to use in an election. The government will argue its tax cuts increased household incomes, but the figures also show that the next stage of cuts will overwhelmingly favour the wealthy.

Labor, on the other hand, can point to the change in how casual work is being used and how people are more and more stuck in work with little security and less opportunity to move to full-time and permanent arrangements.

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