This week we saw our economic growth numbers for the September quarter – overall we grew by a mere 0.6 percent in the quarter, a little less than the market predicted, and 2.8 percent over the last 12 months. This is only moderate growth with interest rates still at historic lows, and given the strong growth in employment recently.
While some business investment is showing some renewed strength, and infrastructure projects are pushing ahead, household spending was still pretty flat, reflecting historic weakness in wages growth. Average Australians are still struggling to make ends meet as they deal day-in-day-out with significant increases in key costs of living – housing, medical, power, childcare and school fees, insurances, etc.
This is our 26th year without a recession – the longest period of recession free growth of a developed country. Against this, it was surprising that a global survey by the Pew Research Center of 43,000 people in 38 countries, also released this week, putting the question as to whether “Life in our country is better or worse than it was 50 years ago for people like me”, found just 50 percent of Australians felt that they were better off.
Of course, the most positive assessments were in countries such as Vietnam (88 percent), India (69), and South Korea (68) where there have been quite dramatic economic transformations since the late 60s, not to mention the end of war in the case of Vietnam. For comparison, Japan and Germany scored 65 percent better off, and the Netherlands and Sweden 64 percent. People in the US were split 41 percent worse off, 37 percent better off, while a clear majority considered themselves worse off in Greece (53), Nigeria (54), Venezuela (72), and Mexico (68).
A general conclusion of the survey was that views of the current economy are a strong indicator of whether people say life for people like them is better today than it was 50 years ago, even when allowing for demographic factors of income, education, gender and age. Indeed, it was concluded that, “across the countries analyzed, people with positive views of the current economy are 30 percentage points more likely than those with negative views to say life has improved for people like them”.
Our mere 50 percent positive is clearly consistent with concern among average Australians about the strength of our economy.
One interesting aspect of the survey from our point of view was in terms of age differences. Some 63 percent of our young people aged 18-29 say life is better today, while only 41 percent of those aged over 50 would agree. We have the second biggest youngest-oldest difference after the UK in the survey. Our young have never really experienced adverse economic conditions.
Education is also an important factor. Our people with more education (59 to 45) say that for them, life is better than it was a half-century ago. Our educational divide (of 14 percentage points) ranks us 8th in the survey, the highest being Poland and Peru (with 19 percentage points). There are some 1.3 million university students today compared to about 86,000 50 years ago
Sentiments and perceptions matter in politics. The global wave of “populist movements”, often associated with nostalgia for an idealised past, suggests that populist anti-immigrant type parties are more likely to say life is worse off for people like them, than those who are concerned about such movements.
Important lessons here for our political leaders.