How young people are surviving the ‘cost-of-living crisis’: From petty theft to the broken promises of the gig economy
Amid all the noise about the ‘cost-of-living crisis’, a report issued last month by CommBank IQ stands out as particularly compelling because it analyses de-identified transaction data from 7 million Australians, making it the largest study of its kind. Based on actual purchase behaviour (not claimed behaviour), we found the data so strong that we wanted to interrogate one of its key findings: that young people aged 24-29 have made larger reductions in expenditure than any other age group. In fact, their expenditure is significantly outpaced by inflation which indicates this age cohort are worse off today than they were this time last year.
Source: Commbank iQ Cost of Living Insights Report, May 2023
So last week we ran a focus group with six people in their late 20s from Melbourne’s inner north – an area, according to the same report, where people are undergoing some of the greatest cost-of-living pressures in Australia.
Here are the main themes that emerged from our discussion:
Scaling back on essentials to safeguard ‘fun’, discretionary spending;
Broken promises of the gig economy;
Supplementing income with 'side-hustles’';
Money saving hacks: from illicit tobacco and petty theft';
Financial aspirations: the impossibility of home ownership;
Symbols of wealth: why people with money get to invest in their ‘souls’.
Scaling back on essentials to safeguard ‘fun’, discretionary spend
All six participants happened to be renters, and, for each, rent is their biggest expense and financial concern. In fact, half the group’s rents have recently been raised.
However, all of them, with less cash to spend, have started to treat some essentials as discretionary items and, in a sense, some ‘indulgences’ as essential. While perhaps counterintuitive, this approach corresponds with the Commbank iQ data and a well-documented economic phenomenon called the ‘lipstick economy’, where small feel good luxuries take priority over medical appointments or getting your car serviced. Joe, a 28-year-old full-time teacher aide, clearly articulated the group’s shared attitude when he said:
“I’m very conscious of what I spend at the supermarket to make food that will cover two or three meals or something. But I refuse to think about whether to get another beer at the pub on the weekend.”
But having to budget to, for example, go to the doctor’s is not ideal. One of the participants put off seeing a doctor after he hurt his wrist and ankle at work – a warehousing job where he works in a casual capacity. The injuries got worse as a result. If he hadn’t eventually paid for care, his ability to pick up shifts would have been affected.
2. Broken promises of the Gig economy
Some of the most striking experiences of the group were those they’ve had in the gig economy. In particular, the group challenged the lifestyle dream of gig work, which ostensibly promises more free time and flexibility to pursue personal interests. Clare, 29, left a full-time job after the Melbourne lockdowns to work as a freelance copywriter. She was attracted to the prospect of flexible working hours which could facilitate her creative writing projects. But, since 2022, after getting tired of “chasing pay cheques”, she’s been applying for secure work, so far with no luck:
“It just feels like the way of the job market now is that people only want to sign you on for task-based work and that just feels like a systemic failure. That makes me kind of angry sometimes.”
Louis, 27, is in a similar position as a casual worker. It’s true that when he isn’t working he has time to make music – but he’s found that such time is also marred by financial stress. He told us, “My workplace has been fishing for a full-time position in front of me for a long time, which I’m starting to get suss of.” Eloise is a little younger at 23. She’s been looking for full-time or part-time employment since finishing university but at the moment has only been able to find contract work. She described how a company recently invited her to negotiate her rates as a freelance transcriptionist, but after she came to them with an offer they “basically prescribed the rates to me, they said you’ve got to give us these rates or we’re not going to hire you.” Because the arrangement is piecework, her pay worked out to roughly $16 per hour, far below the national minimum wage.
The two participants who had permanent employment were happy about it. Joe said that securing a job in a public school where he knows his contract will be renewed automatically was one of the most “deeply relaxing” moments of his life. He also said of his years in the gig economy:
“The [gig] work isn’t flexible, YOU are flexible... around their demands.”
3. Supplementing income with ‘side hustles’
Most members of the group also had some ‘side hustle’ to supplement their income, or were trying to develop one. Monique does make-up artist jobs and Twitch streaming; Clare sells clothes on Depop; Honor babysits; and Louis teaches guitar. But while Louis, for example, wants to teach more guitar so that he has money “to have fun again”, Monique has found that “working full-time and trying to do side hustles is challenging.” Certainly, you need to have time as well as money for fun.
“Almost everyone I know is looking for side hustles at the moment. I try to do makeup jobs [on the side]. Every now and then I’ve sold some art. I do Twitch streaming sometimes, but I’m just too tired to do it always, so it’s hard. Like, working full time and trying to do side hustles is challenging.”
4. Money-saving hacks: from illicit tobacco to petty theft
In addition to such side hustles, everyone we spoke to had some (more or less illicit) money-saving ‘hacks’: posing as a student for cheaper movie tickets, buying untaxed illegal tobacco known as ‘chop-chop’, bringing your own beers to the pub, not tapping-on to trams and trains, and taking public toilet paper home for… private use. A few also stole from Woolworths and Coles.
In fact, recorded shoplifting is high across Australia at the moment – with, for example, a 24% increase in NSW since 2021. A representative of Coles says the supermarket chain is experiencing ‘elevated theft’ – and indeed one of our focus-group participants noted that, with the introduction of AI surveillance technology at self-checkouts and security labels on certain items, “they’re now making it harder and harder” to steal. According to Roger Wilkins, deputy director of the Melbourne Institute of Applied Economic and Social Research, “high inflation plus interest rate increases are good candidate explanations for an increase in theft from retail outlets.” That doesn’t mean, however, that beans and rice are the coveted items: a couple of the young Australians we spoke to shoplift “especially for fancier things”. One enjoys a “truffle cheese in the panties moment” as a means for later “tasting how it would feel to buy groceries in that price range”; another walks out with smoked salmon for a human, and Fancy Feast tinned beef-in-gravy for a stray cat.
“I steal smoked salmon for my lunches. I just put it in my bag and walk out with it.”
5. Financial aspirations: the impossibility of property ownership
When financial aspirations were brought up, the conversation turned immediately to home-ownership. All of the participants see buying a house as an “impossibility” – and think this signifies a generational divide. Interestingly, a few mentioned that they wouldn’t mind not owning a house per se: moving around can actually be exciting and suturing yourself to a property can be kind of stultifying. But, under present arrangements, renting is financially and psychologically draining. As Honour said, “it feels a little bit ridiculous that to just live in a house takes more than 50% of your income.” Or in Joe’s words: “I don’t want to have to think about whether I can access a house. I would love to be in a position where that wasn’t a question.”
6. Modern symbols of wealth: why people with money get to invest in their ‘souls’
Finally, we spoke about symbols of wealth. In the above video Joe rags on wealthy people with “values and shit” and their handcrafted wooden serving spoons which connect them to something, “or some shit…” Louis then responds that, while he resents such people, he almost feels sorry for them too: “it’s like they’ve gone to so much effort to do nothing.” But eventually it comes out that facile products of consumption, like handcrafted wooden spoons, for these young people, also point to the real opportunities you need money for: music lessons, travelling, and so on. In keeping with how many of them were drawn to the supposed flexibility of gig work because it might give them time for other pursuits, much of this group ended up agreeing that they are angry not because the rich drive expensive cars but, more precisely, because the rich, unfairly, have resources to invest in their own “souls”.
Thanks for talking with us Joe, Honor, Monique, Clare, Louis, and Eloise!
