In 1996, as a fresh-faced university graduate I landed my dream job in a respected Big 4 consultancy firm, embarking on a promising career with a salary of $55,000. This was more than just a pay cheque; it represented a ticket to an exciting career, financial stability and a foundation for building a future. Fast forward to 2023, and the landscape of our financial aspirations has shifted dramatically – not for the better.
Over the past 27 years, we've witnessed cumulative inflation of 75.9% in Australia, at a average annual rate of 2.75%. However, this innocuous rate belies a harsher reality. Today, the same entry-level consulting position at a Big 4 firm offers a salary of $75,000. While this appears to be an solid increase, it's actually a mere 1.2% annual rise, starkly lagging behind inflation. The compound effect over this nearly three decade period is not just a statistic; it's a huge 34% loss in purchasing power.
Consider this: In 1996, a university graduate working a standard five-day week was sufficient to maintain a certain standard of living. Fast forward to 2023, and to achieve the same standard of living, one would need to toil for 7.5 days a week – a mathematical impossibility that underscores the severity of our situation. This discrepancy is not just a challenge; it's an alarm bell for the intergenerational equity and wellbeing of our society.
The plight of young Australians today – Millennials and Gen Z – is not just a narrative of unfulfilled aspirations; it's rooted in these economic shifts. While they sense the unfairness, the cause of the issue eludes them. It's not just about working harder; it's about how the value of their hard work has been eroded over time.
Let's delve deeper into the concrete impacts of this economic shift, particularly in the housing market. In 1996, the median house price in Sydney was $233,250, a figure 4.25 times my Big 4 starting salary. Home ownership was definitely achievable. Fast forward to 2023, and the median house price has skyrocketed to $1,334,000. This price is now an astronomical 17.8 times the equivalent starting salary - for the same university graduate doing the same job. The dream of homeownership, once a reachable milestone for young professionals, has morphed into a daunting, often unattainable goal.
This scenario paints a stark picture of what happens when monetary policy and banking practices converge to dilute the value of our currency. The Reserve Bank of Australia (RBA) and the banking system's approach to increasing the money supply has not only fueled consumer price inflation but has precipitated a more insidious form of asset price inflation. The wealthy, in a bid to preserve their wealth and reap tax benefits, have turned away from the local currency, investing in real estate and exacerbating the divide.
As parents, we inherently desire a better future for our children. Yet, the current trajectory is not just disappointing; it's alarming and unsustainable. The question then arises: How do we navigate this tide of economic change? The answer may lie in embracing a different kind of currency – Bitcoin.
Bitcoin, often misunderstood and misrepresented, offers a stark contrast to the traditional financial system. It's a decentralised digital currency, not subject to the whims of central banks or the pitfalls of traditional banking practices. Its supply is capped at 21 million coins, making it immune to the kind of inflation that has eroded the Australian dollar's purchasing power and runaway house prices.
Bitcoin's decentralised nature means it's not just a currency but a movement towards financial sovereignty. It empowers individuals to take control of their financial destiny, free from the constraints of a broken fiat system. For young Australians struggling under the weight of economic disparity, Bitcoin offers a ray of hope – a chance to participate in a financial system where their hard-earned money retains its value over time.
The erosion of purchasing power, coupled with skyrocketing asset prices, has created a daunting challenge for Australia's younger generations. However, in the midst of this financial turmoil, Bitcoin emerges as a beacon of stability and potential. As we strive to build a more equitable and prosperous future, it's time to seriously consider the role Bitcoin could play in achieving this vision. It's not just about adopting a new currency; it's about embracing a new paradigm of financial integrity and sustainability.