Millennials Are Being Squeezed Out Of The Middle Class
According to a new report produced by the Organisation for Economic Co-operation and Development (OECD), the middle class is struggling globally and shows that millennials are facing the most pressure.
The OECD report describes how the middle class is shrinking across the globe, with a significant fraction of the people who fall into this category now described as economically vulnerable (40 percent).
In Australia, to fall into the middle-class bracket, a one-person household needs to be earning between $35,701 and $95,203 per year.
Most Australians fall into this range -- with 32 percent defined as lower-income class and only 10 percent defined as upper-income.
In the US, the income disparity is higher, with 35 percent defined as belonging to the lower-income class and 14 percent falling into the upper-income class bracket.
The cost of housing has increased sharply but overall earnings have failed to keep up the same pace.
Australian housing has been consuming an increasingly large portion of our earnings -- in 2005, 19 percent of our income was going towards our houses and a decade later, 32 percent was devoted to keeping a roof over Austalians' heads.
In addition to this, one in six middle-income jobs are now at risk of being replaced by automation.
The OECD found that millennials are relatively unable to accumulate wealth compared to other generations. Only 60 percent of millennials belong to the middle class -- compared to 68 percent of Baby Boomers and 64 percent of Generation X.
The OECD recommended that governments make comprehensive action plans to slow this trend by improving access to "high-quality public services" and ensuring better social protection coverage.
The report also encourages governments to increase taxation of property, capital gains, as well as shifting tax burdens to increase equality.