An Australian worker has sparked debate on social media after claiming the aspirational middle class salary has doubled from $100,000 to $200,000 a year.
The Melbourne resident took to social media this week saying: ‘Working in my 20s it was all about trying to create a pathway to a $100k salary’.
‘It felt like that was needed to afford a middle class lifestyle (but) I would argue inflation and housing affordability has pushed this to $200k.’
According to official figures the median annual salary of Australians in 2022 was $65,000 a year.
The Aussie added: ‘Now in my late 30s I suggest you are middle class right up to $300k’
Households with mortgages are particularly feeling the cost of living crunch after a series of rate rises by the central bank (stock image)
People. differing opinions over whether that was considered a middle class salary, but most agreed the household cost-of-living had increased dramatically.
‘Amazing how just 10 years ago my wife and I could get by on $70k or less,’ one person said.
‘Now at around $250k in a medium cost of living area and having learned a lot more, it seems like we’re just able to afford everything we need.’
Another agreed saying: ‘My wife and I did fine on 85k 10-15 years ago. Now on 200k and really what the extra $100k/yr bought us was more stability.’
However one argued: ‘$100k is a lot of money. How much stuff do you need?’
‘Yeah $200,000 is more than than what the vast majority of the world earns,’ agreed another.
Another said: ‘100K is probably good for an individual, but for a family 200K or more is needed to be comfortable. 300K if you want to be able to live a comfortable life and invest properly.
A fifth said: ‘Having two “professionals” will get you 200k in house hold income. 200k household is MORE than enough in everywhere but the big cities.
‘But cities are quickly losing their appeal mostly because the cost of living is worth it anymore and with things becoming increasingly remote anyone who can is simply moving away.’
A sixth declared: ‘I agree, but obviously it’s very location dependent. In most areas where a 200K salary is possible, I think you’re correct.
‘Remote work opens that up a bit so if you’re in a relatively cheap rural area but working remote in the 100K-150K range you could live very well.
Another said: ‘Would have to 10000% agree. Last tax year I made 330k. This year I’m set to make 380k, 400 if I’m lucky and I still feel like there’s no chance of getting ahead.
‘I don’t buy stupid things. Nor does my wife- she doesn’t even have a car. We own our apartment and that’s it and yes we have savings but cant afford a home in our area and would most definitely have to do something illegal to get more money in the bank.
Meanwhile, a seventh claimed: ‘As a single income $200k probably keeps you in middle class simply because most will spend more to live better lifestyles eg travel, sole occupancy dwellings, restaurants etc. A couple earning $200k each ($400k combined) definitely pushes you above middle class assuming average 2.5 children without extenuating medical expenses.’
Another said: ‘I agree, in the 90’s when I was a kid 100k was big money, like nice house, big camper and a boat money. Now 100k is relatively comfortable, you can afford a decentish apartment and squirrel some money away at the end of the month. If my partner and I both made 200k we would easily be able to own a house and heavily put money towards retirement, so yeah I agree.’
One declared: ‘The key is always living below your means. It’s amazing how well you can live when you don’t have a massive car payment, phone payment, mortgage 2x what you can actually afford.’
The Reserve Bank’s series of interest rate hikes have hit particularly hard on those Australians with mortgages, raising the monthly repayments by on average thousands of dollars.
Those households would typically fit into the $100,000 to $200,000 earnings range with lower incomes less likely to be buying houses and higher incomes likely to have paid their mortgages off.
House prices have levelled somewhat but the tight rental market is still pushing rents higher
This month’s inflation figures have been nudged a little higher by climbing petrol prices but it’s likely not enough to spur the RBA into yet another interest rate hike.
The consumer price index (CPI) for August came in at an annual rate of 5.2 per cent, up from 4.9 per cent in July.
Annual growth in the indicator, which tracks the cost of buying the same basket of goods and services over time, was in line with market forecasts.
Most observers expected inflation to pick up again after higher prices at the petrol pump.
Automotive fuel prices rose a substantial 9.1 per cent in August and were up 13.9 per cent over the year.
Along with fuel prices, which fall under the broader transport category, housing, food and insurance were the other major drivers of the annual increase.
The overall housing category moderated a little, with new dwelling prices recording their weakest annual increase since August 2021 to reflect easing building material costs.
However, the tight rental market kept rents moving higher.
Treasurer Jim Chalmers believes the peak of inflation has past.
‘While inflation remains higher than we’d like for longer than we’d like, it is expected to continue to moderate over the year ahead,’ he said.
Inflation was the primary focus of the government taking the edge off power bill hikes, he said.
Treasurer Jim Chalmers said the peak of inflation has past and prices should stablise
Shadow treasurer Angus Taylor said the government should be doing more to rein in spending and take pressure off inflation, he said.
‘Labor must treat inflation as priority one, two and three,’ he said.
EY senior economist Paula Gadsby said the Reserve Bank was likely to look past the stronger fuel prices, given it was expected and featured in the minutes from the last board meeting, but services inflation would linger as a risk factor.
Data was still unfolding close enough to the RBA’s own forecasts to keep interest rates on hold in October, she said.
‘But the Reserve Bank will be ready to pounce if productivity fails to improve and services inflation remains more persistent than expected,’ she said.
‘The risk of another rate hike remains, but our core expectation is that the Reserve Bank will sit tight.’
The quarterly inflation print, due in late October and after the next interest rate meeting, will give the RBA a more complete picture of the inflation challenge.