Hooray for HILDA
The findings from the annual longitudinal survey of Australian income and employment trends are not as grim as the usual cynics would have you believe, says Tim James
HILDA knows how we’re faring and feeling, and it’s not good! That’s the essence of reporting this week after the latest Household Income and Labour Dynamics in Australia report was published.
“HILDA can explain why you feel no better off than 10 years ago” reported the ABC. “There’s a reason you’re feeling no better off than 10 years ago,” headlined The Conversation. “Without a wages boost we face a lost decade of living standard growth,” said Greg Jericho in The Guardian.
So who or what is HILDA? It’s an annual survey of the same 20,000 people across Australia. It has been described as an economic version of the well-known 7 Up series because it tracks the same group of people, and has done since 2001.
HILDA provides a wealth of data for those who analyse and make policy. Media reports on HILDA 2019 have overwhelmingly spoken of stagnation and difficulty in Australia’s development and living standards since the GFC.
It is uncontested that between 2001 and 2009 Australia’s economy and incomes grew strongly, thanks to a mining boom, strong trade conditions and good government. The period since the GFC has been more challenging.
I was a panellist on The Drum on ABC-TV on Tuesday, when the host and other panellists were overwhelmingly negative about HILDA's findings. To be fair, HILDA does reveal areas of concern, such as the increasing cost of childcare, mental health and urban congestion. But it also contains reasons to be realistic, understanding and hopeful, even positive.
I was the lone voice of positivity. The Australian story in economic terms since the GFC has been one of resilience and relative strength. It’s correct that growth fell after the GFC, and incomes have flattened out, but Australia avoided recession. Our economic stability has been the envy of the world.
Some people on social media suggested Kevin Rudd and Wayne Swan deserved credit. Wrong. It wasn’t Labor policies that saved Australia from the GFC, it was the solid state of the economy, government budget and sound regulation forged during the Howard years that enabled Australia to withstand the GFC.
Since the GFC, Australia has enjoyed low interest rates, low inflation, high employment, a strong safety net and a big, stable middle class.
Australia’s median household wealth is now a remarkable $1 million, which is a 37 per cent increase from a decade ago. This is conveniently overlooked by those who criticise our nation and economy.
Moreover, just last year a global Credit Suisse report found that Australia has the highest median wealth in the world, overtaking Switzerland. Importantly, it also confirmed that not only are Australians relatively rich by global standards, our wealth is more evenly distributed across the population than many other countries.
There were other positives in HILDA that received little attention. These included the rise of female employment and income. Women’s hourly earnings rose by 24 per cent between 2001 and 2017 (for men it was 21 per cent). Women’s full-employment is trending upwards and women are now only six percentage points more likely than men to be employed casually.
More so than stories of stagnation, criticism or calls for greater welfare arising out of HILDA, we should be positive about our economic performance and progress, whilst ambitious for better still.
Ideally, rather than raising negative reports, the real story of HILDA should be to bring forth calls for and contributions to the reforms required to lift national and individual income across Australia. This means productivity, competition and more microeconomic reform, labour market reform, taxation and infrastructure, to mention just a few.
There’s always room for improvement and of course we can do better nationally and individually. As I said on The Drum, the Australian economic story is a very good one. We ought not let naysayers and negative nellies dominate discussion and debate.