Originally Posted by ImperialX
I would like to point out that the while on the surface it's a lot more luxurious for us compared to you in your younger days, because the cost of entertainment nowadays is relatively cheap. However, the real important things in our life cost a lot more now. Things such as real estate, health insurance, food, transportation...I can go on.
I don't think it's easier for us nowadays compared to say...the last generation. Yes, I have a decent HD800 setup and I'm only 19, but when am I going to afford my first home? How long will I have to save up for that?
Sorry for the following rant but I get quite fired up when people think that their generation is having it harder than the previous one and start idealizing the past.
Since you live in Australia the cost of an average house is about 7 years of earnings assuming you are an average full time worker. In 1990 it was about 5 years. The major cities have seen about an 80% increase in housing prices since 1990. This data is corroborated by many studies both by the federal government and independent scholars, however none of the "real important things" are valid examples of how the cost has gone up.
Life is easier now than it was before; you cannot just look at housing prices and make a judgment on that alone.
Underlying assumptions; I will refer to the past as 1990 since since there is a lot of data available from that time, also a "generation" is roughly 20 years. The average adult had a salary of $28,000 (mean); now the average adult earns $73,000 (mean). This is nearly a 300% increase in nominal income from about $500 to about $1400. Interest rates are also substantially lower, in 1990 the Reserve Bank cash rate was over 17%; now they are about 3%.
In 1990 you had a 17% interest rate. The average mortgage in Australia was $71,000. This is about $1000 of repayment a month. It was about 45% of the average wage.
In 2010 the average 7% (CBA). Average mortgage was $347,000. This is about a $2400 repayment (Your HD800 and amp was probably a month's mortgage for the average Australian). This is about 42% of average wage in 2010.
The true cost of a house isn't the nominal value, it's the financial burden to own that house.
A Holden Commodore in 1990 was $23,000 (cheapest V6); now it is $33,000. Thats 82% and 44% of respective mean annual incomes. (Redbook values)
Cost of petrol is higher now but this is more than offset by the much higher income and much relative cost of a vehicle.
Cost of a liter of milk in 1990 was about 85 cents. Now you can buy a liter of Home Brand milk for a dollar or so. You will find that almost no food has increased almost three fold in the last twenty years.
Hard to argue this one. Primary and secondary school has always been free. As far as University education we no longer have full fee paying Undergraduate, however even during the Howard era the amount of full fee paying domestic students was under 3%. Moreover, combined with HECS and FEE-HELP as well as the most expensive band being only some $7k a semester for 3 years (most Honors and 4th years get scholarships), it can hardly be thought of expensive to be educated now in Australia.
CPI data sees a 80% nominal increase in cost of living since 1990. This is far lower than the nominal rise in average worker wage. I didn't bring this up as my first point because I wanted to illustrate how specific goods and services are not any less affordable now than in 1990 (except housing).
It was 6% at the beginning of 1990, by the end of 1992 it was over 11%. Currently it sits are 5%.
If I recall correctly when the HD800 launched in Australia it was well over $2000, now you can find them for $1500. In the early nineties anything imported cost an arm and a leg. I remember having friends in high school that paid over $800 for a PS3 when it came out. I remember going to Dick Smith or the Sony Style store and the cheapest Mini Disc player was well above $500 and the average $10 Sony Earbuds you find now were something near $50.
The cost of living in Australia is definitely not higher and I can go on about other nations to. The middle class is still as large in Australia as it was about twenty years ago. Australian values are still being upheld and morality hasn't gone out the window. Australia's gini coefficient puts it second in the world. Our nominal GDP per capita is amongst the highest in the world (higher than the US) and our PPP is still very much up there as well.
In every objective measure Australia (and most of the industrialized world) has been trending upwards. Please don't act like you are facing hardships that previous generations didn't have to face because that is ignorant at best and entitled at worst.
By the way I am 24 and a student so I am not typing this from an ivory tower with my house paid off and a couple cars in the garage. You and everyone of our generation have it easier than those that came before us and you know what? Our children are going to have it easier than us.