Two in three think children will be 'worse off' than their parents
Two thirds of adults believe today's generation of children will be 'worse off' financially than their parents.
Just 28 per cent feel confident the next generation will be "better off", making Australians more gloomy than the typical response in advanced economies of 34 per cent.
The results come from the latest annual global survey of economic attitudes released by the Pew Research Centre in Washington DC.
The percentage of Australians who think children will be worse off has risen sharply, from 53 per cent in 2013 to 65 per cent in the latest survey.
Australia has the fourth highest "experience-expectation" gap of the 27 countries surveyed – that is, the gap between the percentage of people who rate the current economic situation as ‘good’ (67 per cent) and the percentage who say children will be ‘better off’ financially (28 per cent).
“This experience-expectation differential is greatest in the Netherlands, Sweden and Germany” followed by Australia, the report finds.
“Pessimism about the future is especially striking in some countries where current conditions are rated positively, as doubts remain about the next generations’ financial well-being.”
Overall, global optimism about economies has improved since the dark days of the global financial crisis a decade ago.
But “despite the dramatic improvement in the public’s view of national economic conditions, in many societies people are not that hopeful about what lies ahead for the next generation”.
The report's author, Bruce Stokes, said it was not possible to tell from the survey why Australians seemed relatively more gloomy about their children's futures versus current conditions.
"Australia has had a generation without a recession. Maybe people are worried this can’t continue. But we just don’t know."
Chief executive of the Grattan Institute, John Daley, said tepid real wages growth in recent years, combined with concerns about housing affordability were likely sources of concern.
While young Australians had so far escaped the fate of peers in other advanced countries – such as the United States and Britain – where some generations were earning less than their parents, there were warning signs.
“I think it’s a distinct risk and it will depend very much on what happens to real wages,” Mr Daley said.
From a wealth perspective, Mr Daley said older generations were living longer, meaning younger Australians would be much older than previous generations before they could enjoy the benefits of inheritance – although the 'bank of mum and dad' would enable some to build wealth.
Older Australians are the most gloomy about children’s financial futures. Just 24 per cent aged 50 and over think today's children will be better off than their parents, compared to 38 per cent aged 18 to 29 who think the same.
Professor Mark Wooden from the Melbourne Institute says pessimism may be overdone.
“The evidence is pretty clear that on incomes to date, and wellbeing on all sorts of measures – life expectancy, name any measure you can think of – the kids are better off. But everybody thinks that their generation is the last.”
While homeownership rates had fallen, young people had amassed more savings in superannuation. Real incomes were still rising, despite a slower pace of growth.
"The real issues is around distribution, rather than actual levels. Up to this point, every generation has been better off.”
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