Young Australians feeling more hopeless amid cost of living crunch

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An increasing number of younger Australians are reporting feeling disconnected and isolated, due in part to the current cost of living crisis putting younger generations under stress and affecting their wellbeing.

With interest rates rising 12 times over the past 14 months, young Australians are struggling as their baseline expenses like rent are being pushed up, exacerbated further by speculation about a looming recession. At the end of 2022, 76 per cent of Australians were either very or quite concerned about the possibility of a major global economic downturn, and the impact it could have on Australia.

Soaring interest rates and inflation are contributing to a cost of living crisis leaving young Australians feeling under the weather.Credit: Josh Robenstone

In the more immediate future, issues including inflation and the rising cost of living across the board are dominating the minds of Millennials and Gen Zs, worsened by the minimal relief in this year’s budget.

“So many young people are struggling to pay bills and keep up with rising costs,” says Justine Underhill, a 21-year-old student from Albury.

According to the Scanlon Foundation’s annual report mapping social cohesion, only a third of young Australians feel a sense of belonging in Australia and feel pride in our culture and way of life. This has declined from 60 per cent in 2009, when the survey was first conducted.

“Social cohesion and belonging goes to our personal and collective well-being. It is clear that young Australians are being impacted by economic issues, and when people are struggling financially or worried about losing their jobs, this drives a lower sense of belonging,” says Dr James O’Donnell, the author of the study.

“Young people are not feeling as though Australia is equal and egalitarian, especially when it comes to economic issues”.

It’s not just young people worried about their financial state; the Scanlon report found that economic pressures are the top concern for 39 per cent of Australians, followed by environmental issues and housing affordability.

However, there is a growing divide between generations, with Australians aged over 65 recording considerably higher levels of pride in Australia, trust in Australian institutions and overall sense of belonging.

“Young adults are impacted heavily by these financial pressures, as they are the ones entering and at the lower end of the job markets, paying mortgages or rent,” says O’Donnell, with older Australians largely at a different financial stage and often impacted less.

The flow-on-effects of this financial stress include lower mental and emotional well-being on a personal level, as well as a broader disconnection from socialisation.

“How [young people] relate to their communities, how they relate to people and the connections they make are all influenced by financial pressures,” says O’Donnell, with this impacting how we function as a society overall.

There are serious flow-on effects from an ongoing decrease in sense of belonging, with measurable social decline and mental health impacts and the possibility for broader social disruption.

“We’ve seen in many countries around the world what happens when ongoing financial stress turns causes lack of social cohesion and turns into chaos,” says O’Donnell.

O’Donnell argues that we need to address this social dislocation by fixing the root cause, through improvements to the labour and housing markets that translate to rises in the standard of living.

Georgia York is a freelance journalist and writer.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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