Millennials are not becoming more conservative as they age – and the rigged housing market is just one reason why
While income inequality is an often discussed topic, wealth inequality is just as pernicious though often less discussed issue. Worse still the inequality of wealth across generations has lasting impacts for people into retirement.
Policy director Greg Jericho writes in his Guardian Australia column how economic policies of the past few decades has served to provide those with wealth more of it, while depriving younger people of gaining a foothold that previous generations had.
The issue is most acute with housing. Housing affability is often debated with some suggesting that because of lower interest rate than in the past owning a home is not as difficult as in the past. But the reality is that the size of the mortgage relative to incomes is so much greater than in the past that even with lower interest rates payments account for much more income than they used to. Whereas for those entering the housing market in the 1980s one incomes was often more than enough, now two incomes is a necessity.
But what is often forgotten is that while interest rates were higher at times in the 1980s and 1990s those rates fell and with them did the payments all the while incomes rose. As a result those who bought homes in the 1980s and 1990s saw their repayments as a share of income fall to very low levels – levels unheard of now.
And while the arguments about whether housing is more or less affordable can turn on definitions of affordability, the fact is that for the first time fewer than half of people aged 30-34 own their own home. That’s not through choice, but through the reality of a housing market that is locking out younger people.
This in turn sees younger generations have less wealth at their age than did their parents and grandparents.
It is little surprise that Millennials are not becoming more conservative in their voting as they age in the same way that did Baby Boomers and Gen Xers. The wealth inequality will have ongoing repercussions for political parties who have in the past taken it as given that older voters will vote for them.
Tanya Martin Executive Assistant
Jake Wishart Senior Media Adviser