But for those aged between 35 and 64, incomes rose by 1.4 per cent a year. Retirees and those 65 or older did far better, with their incomes up by 3.2 per cent a year.
Commissioner Catherine de Fontenay said under 35s were bearing the brunt of a major change in incomes that was benefiting older people at the expense of the young.
“Young people have experienced a lost decade of income growth. This means they entered the COVID-19 crisis already on lower wages and usually with limited savings,” she said. “It turns out that the low wage growth story is essentially a story about people under 35. If we look at average wage growth for those over 35, it hasn’t slowed.”
Before coronavirus decimated his industry, 25-year-old Melbourne theatre writer and actor Ben Nichol had been travelling Australia and Europe touring theatre shows.
But at the end of February as Australia’s first COVID-19 surge began, Mr Nichol saw the writing on the wall for his work and moved back to his family’s Ringwood home where he’s been ever since.
The young creative says many people his age – even those in more secure industries than the arts – are facing a murky economic future.
“When I speak to my parents or older friends, the pathway [from study to full-time work] was very clear,” he said.
“I think it’s quite a scary thing now, most people I talk to don’t have a plan,” he said. “Even friends I have that want that career or a [9-5] lifestyle have found that hasn’t worked for them.
“It breeds an apathy, a fear and sometimes a recklessness, because there’s no guarantee that hard work will pay off,” he said.
The commission found there were several factors driving down the incomes of young Australians.
It found the national jobs market became more competitive after the financial crisis, with businesses offering young people lower starting wages while not cutting the wages of those they already employed. Part-time work has increased, with much of that going to younger people.
Federal governments at the same time reduced support for many students and young parents, tightening eligibility for Youth Allowance and family tax benefits. Government support payments to the young are indexed to the consumer price index but for retirees the age pension is indexed to wage rises, which have grown faster than prices.
Younger Australians, facing a more expensive property market, have also had to rely more heavily on their parents, which may not be an option for those from lower-income backgrounds.
Even the increase in the retirement age has hurt young people, increasing the number of people in the jobs market.
The real fall in incomes has left young people exposed at the worse possible time, with the country going into recession, running down their savings and with few investments to offset any wages drop.
“The inescapable conclusion of this study is that because of slower income growth, young people were not able to build their savings at the same rate as earlier generations,” the report found.
“Finally, young people are likely to experience higher taxes during their working life, to recover the current cost of dealing with the pandemic.”
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.