Earn
Young Australians take $7bn income hit
Australians aged between 18 and 23 who began their careers during the COVID-19 recession are likely to see a long-term negative impact on their finances, according to new research.
Young Australians take $7bn income hit
Australians aged between 18 and 23 who began their careers during the COVID-19 recession are likely to see a long-term negative impact on their finances, according to new research.

Consulting group EY has found that young Australians who are entering the workforce during the COVID-19 pandemic could lose $32,000 in wages over the next decade as well as lose $30,000 in superannuation.
This will collectively cost younger Australians an estimated $7 billion in lost wages over a 10-year period.
“Australia’s first recession in close to 30 years will be felt by all age groups, with most of the country’s workforce having never worked during a recession. This analysis provides a snapshot of how one demographic – 18 to 23-year-olds entering the workforce – will be impacted, but it also provides insight into what can be done by individuals and businesses to lessen the negative impact,” said EY’s chief economist, Jo Masters.
Using government data, the findings show that 90 per cent of an individual's income growth occurs in the first 10 years of working, meaning that not only will the recession have an immediate impact on wages, it will have an everlasting impact on future income.

“For young Australians who are facing lower job opportunities in subdued economic conditions, upskilling via short courses, improving financial literacy and exploring jobs that present the opportunity to improve jobs skill match or boost income, and ensuring a proactive savings plan are steps that will help them to overcome the economic challenges,” Ms Masters said.
She highlights that just because younger Australians have an uphill battle does not mean they can’t regain some of their losses.
“There is no doubt starting a job in a recession is hard; however, young Australians have a clear choice to make. They can either be a passenger or a driver. The passengers risk consigning themselves to the wages’ slow lane, while the drivers give themselves a fighting chance to attain goals for their career, home ownership and retirement,” Ms Masters explained.
The economist highlighted that the findings do not just have an impact on young people, but also employers and government decision making.
“Workforce behaviours and expectations will change – employers will need to be more flexible on expectations about years worked in a job and there should be greater value placed on other sector experience. Strategies around talent retention will be crucial, along with workforce planning and mapping skills to future roles,” Ms Masters said.
“The government is already pivoting from immediate support during the lockdown phase towards policies to underpin sustainable economic growth and job opportunity. While there is a role to support those facing into an economy in transition, proactive policy will also be needed to encourage job creation, assist with skill matching and supporting proactivity through financial literacy,” Ms Masters concluded.
About the author

About the author


Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more

Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more

Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more

Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more

Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more

Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more

Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more

Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more

Salary
The financial benefits of a diversified income stream
In today’s volatile economic environment, relying solely on a single source of income can be risky. Diversifying your income streams can provide financial stability, reduce the risk of financial ...Read more

Salary
Despite losing top spot, Elon Musk rakes in $400,000 hourly
Elon Musk, the entrepreneur known for his involvement in a wide range of innovative and technological businesses, has recently been dethroned as the wealthiest individual in the world, with Bernard ...Read more

Salary
Rising unemployment and skill shortages prompt Australian businesses to look globally for talent
Australia has witnessed its unemployment rate surging above 4% for the first time in two years, revealed by the latest Labour Force data. Read more

Salary
New findings link job mobility hurdles to stagnant wage growth
Recent research from the e61 Institute has unearthed significant links between slow wage growth in Australia and obstacles to job mobility, including non-compete clauses, complicated occupational ...Read more

Salary
Employers scrambling to prevent workplace brain drain
As workplace managers face a swiftly evolving employment market that’s increasingly favouring the demands of white-collar employees and jobseekers, bosses are falling under mounting pressure to ...Read more

Salary
Unions back Albanese’s pledge to close gender pay gap
An electoral promise from Labor to make gender pay equity an objective of the Fair Work Act has been hailed as a “watershed moment” from industry peak bodies who have traditionally advocated for ...Read more

Salary
Coles asked to disprove $115m in alleged wage theft
One of Australia’s biggest supermarkets faces allegations that it underpaid more than 7,500 employees a total of $115 million. Read more

Salary
Gen Z left behind in progress to gender equality
Women under 25 may emerge from the pandemic in a worse financial position than when it began, new research has shown. Read more