Every generation thinks they had it the toughest, but for Gen Z, they’re probably right
- Written by Intifar Chowdhury, Lecturer in Government, Flinders University
Every generation thinks they had it tough, but evidence suggests young Australians today might have a case for saying they’ve drawn the short straw.
Compared with young adults two or three decades ago, today’s 18–35-year-olds may earn more, but they also grapple with soaring living costs, rising education expenses, precarious employment and mounting debt.
Shifts in the economy and labour market have restructured young adulthood, creating new barriers to financial security and delaying milestones such as home ownership, partnership and parenthood.
How does this compare to what life was like for young Australians at the turn of the century?
Increasing education, decreasing payoffs
University participation has risen, but so has student debt. It’s now far beyond what was intended when HECS was introduced as a supposedly fair, income-contingent loan system.
Indexation has outpaced wages, so much so that today’s 20-somethings carry debts that are more than $10,000 higher in real terms than their counterparts two decades ago.
The Morrison government’s 2021 fee hikes only exacerbated the crisis, with some degrees nearly doubling in cost, leaving students with an even greater debt burden.
Yet the financial return on education is increasingly uncertain.
Credential inflation has reshaped the job market, with even low-wage positions now expecting a university degree.
The widespread belief that a degree guarantees better pay is driving more students into higher education, yet there are many graduates saddled with debt and working in roles unrelated to their qualifications.
In 1996, 28.5% of 21–25-year-olds found themselves in mismatched jobs.
By 2019, that figure had climbed to 33% just among 25-year-olds.
Salaries aren’t keeping up. Since 1996, graduate wages have risen by a factor of just 2.5, while student contributions have jumped between 1.7- and 6.2-fold. This leaves today’s graduates with debt that consumes a larger share of their income than ever before.
The dwindling dream of home ownership
Housing affordability has collapsed over the years.
Twenty-five years ago, the average house cost nine years’ worth of the average household income.
Now, it’s about 16.5 years.
In 2001, property prices rose 1.3 times faster than incomes. Since then, they’ve surged at 2.3 times the rate.
This is fuelled partly by tax incentive policies – for example, the Howard government’s 1999 capital gains tax changes - and, more recently, the COVID pandemic.
Soaring prices have deepened the intergenerational housing wealth gap, reducing the home purchase opportunity for young people. While the First Home Owner Grant, introduced in 2000, provides some support, saving for a deposit remains a years-long struggle.
That is, unless parents can help.
For many young Australians, intergenerational wealth is now the key to home ownership. Inheritance is becoming nearly as important as employment.
Since 2002, the total value of wealth transfers has more than doubled in real terms, with larger inheritances expected for younger generations due to rising parental wealth and fewer siblings.
But parental wealth is far more unequally distributed than income - shaped by education and region.
Therefore, inheritocracy is set to deepen economic inequality within today’s youth cohort.
But this isn’t just about the ultra-wealthy passing down mansions. Most inheritances involve an ordinary home or proceeds from its sale.
Housing, once central to middle-class stability, now determines who can build wealth and who will struggle financially for life.
Mounting mental health pressures
Meanwhile, Australians today are borrowing more than ever. Default risk is rising fastest among under-30s as soaring interest rates, rent hikes, and cost-of-living pressures squeeze finances.
It’s then no surprise Gen Z is more concerned about finances than any other generation.
Financial stress is taking a heavy toll on young people’s mental health. Between 2007 and 2022, the prevalence of mental health disorders among young Australians surged by nearly 50%.
The burden of disease from non-fatal conditions – measured in years of healthy life lost – has risen 7% since 2003. This is largely due to mental health disorders and substance abuse, which disproportionately affect young people.
Growing up Indigenous
At the deepest end of these struggles are Indigenous youth, who face far greater challenges than their non-Indigenous peers.
Across nearly every measure – education, employment, health and incarceration – outcomes for Aboriginal and Torres Strait Islander young people remain significantly worse.
While today’s Indigenous youth have achieved better outcomes compared to previous generations – 39% of Indigenous Australians aged 20+ had completed Year 12 in 2021, up from 19.4% in 2001 – these gains still lag behind non-Indigenous youth.
Systemic barriers, institutional racism and intergenerational trauma continue to limit fair access to opportunities. This compounds inequalities and contributes to higher rates of mental ill-health, stress and suicide among Indigenous youth.
The changing politics of being young
Undoubtedly, a continued period of instability and psychological distress in formative years is also shaping the youngest generation’s political attitudes and behaviours.
With fewer assets to conserve compared to their parents or grandparents, they are more likely to lean more to the left politically, and this won’t change with age.
Yet, they remain engaged, thanks in part to compulsory voting, but are also abandoning party loyalties.
Australian Election Study data shows 18–30-year-olds were more interested in politics in 2022 than in 1998 (67% vs 63%). At the same time, they were more likely to change votes during campaigns (43% vs 30%) and less likely to consistently vote for the same party (28% vs 40%).
Their right-wing identification has nearly halved since 1998, with the youth vote increasingly favouring left-wing parties (75% vs 61%).
However, younger Australians’ diverse digital news habits add to their political unpredictability. With 60% of Gen Z relying short-form videos, podcasts, and social media platforms for news in 2024, they are increasingly exposed to fragmented, algorithm-driven content.
This shift, coupled with rising concerns about misinformation, contributes to their volatility as voters.
Overall, young Australians are coming of age in an era where hard work no longer guarantees security. How Australia adapts to this shifting economic and political reality will shape the country’s future for decades to come.
This piece is part of a series on how Australia has changed since the year 2000. You can read other pieces in the series here.
Authors: Intifar Chowdhury, Lecturer in Government, Flinders University
