Australia's struggle with 'wellbeing poverty' is a deeply concerning trend that has been gaining momentum over the past decade. The country is witnessing a stark rise in life dissatisfaction, with nearly 2.2 million Australians living below the wellbeing poverty line. This is a significant shift from just a decade ago, when only 4.8% of the population reported very low life satisfaction. The COVID-19 lockdowns and the subsequent surge in the cost of living have played a pivotal role in this shift, leaving many feeling disempowered and alienated in their communities.
What makes this situation particularly fascinating is the correlation between declining life satisfaction and the rise of far-right and populist politics. Those who report low life satisfaction are more likely to feel disempowered and are expressing lower support for multiculturalism. This raises a deeper question: is the decline in social cohesion and trust in institutions a precursor to the rise of populist movements? The data suggests that the answer may be yes, as the sense of self-worth and trust in others is directly linked to economic circumstances.
From my perspective, the stagnation and stagflation in national living standards are a major contributing factor to this trend. Household disposable income per household, adjusted for inflation, is at the same level as in mid-2020, and the outlook is not encouraging. The national economy is expected to drop back into a per capita recession, with low growth and high inflation. This is particularly hard on lower-income households, who are facing a huge rise in prices for essentials such as electricity, insurance, and healthcare. The fact that wages for the highest-paid workers have grown at more than twice the pace of those earning the least is a stark reminder of the growing inequality in the country.
One thing that immediately stands out is the role of housing in this equation. The plunge in life satisfaction can be traced back to dwindling hopes of home ownership, which is likely the single biggest problem. If we managed this issue better, it would go a long way to addressing the broader issue of wellbeing poverty. This is supported by the extensive literature on the economics of happiness, which suggests that satisfaction with life does not track higher with material wealth past a certain middle-income threshold.
However, it's not all doom and gloom. Despite the undercurrents of dissatisfaction and growing financial pressures, social cohesion nationally has proved resilient over recent years. The Scanlon Foundation Research Institute's social cohesion index has stayed steady at 78 over the past three years, although it remains considerably below the recent peak of 92 in 2021. This is a positive sign, as it suggests that communities are actively working to build trust and social cohesion, which is essential to lifting life satisfaction.
In conclusion, Australia's struggle with wellbeing poverty is a complex issue that requires a multifaceted approach. Addressing the economic circumstances of lower-income households, managing the housing crisis, and building trust and social cohesion in communities are all crucial steps in tackling this problem. As Anthea Hancocks, the chief executive of the Scanlon Foundation Research Institute, says, 'building national pride simply in being Australian' is a fundamental element in helping people feel like someone has got their back. It's a challenging task, but with the right policies and community engagement, it's possible to create a more cohesive and satisfied society.
