Millions of Aussies hanging out for pay day

MILLIONS of Australians are forced to live pay to pay, with many unable to financially survive for more than a month if they suddenly lost their job.

It's a growing trend thanks to a "perfect storm" of circumstances, including underemployment, flat wage growth and skyrocketing costs of living.

Kirsty Lane finished up a short-term contract at the end of June and is struggling to find a new role despite good references, a wealth of experience and a willingness to work.

"Jobs which I am more than qualified for have 150-plus applicants, and applying through agencies is tough too as they are filled so quickly, sometimes even before I receive the alert email," Ms Lane said.

The Brisbane admin professional is going for government roles but has also recently finished a degree in public policy and has experience in that area.

But secure, full-time work is hard to come by. She has battled with precarious employment for years, having to rely on short-term arrangements.

"My husband owns his own business, so his work situation isn't stable either," she said.

"There has been a number of times where we've been down to our last $50, then we've had to borrow from relatives or miraculously, one of us gets some sort of short-term contract."

"We went for over a year without paying rent because we couldn't afford that and bills. I am so very lucky that we live in my parents' house."

Ms Osborne is not alone. New analysis from financial comparison website has found 46 per cent of Australians could be living pay to pay.

A huge number of Australians are living pay to pay, and many couldn’t survive financially for more than a month if they lost their jobs. Picture: Cathy Mundy
A huge number of Australians are living pay to pay, and many couldn’t survive financially for more than a month if they lost their jobs. Picture: Cathy Mundy

That equates to some 5.9 million people who might find themselves unable to cope with the sudden loss of their jobs, only able to survive financially for a month or less, money expert Bessie Hassan said.

"What's really troubling is just how many households are struggling and hanging out for payday," Ms Hassan said.

The research found 36 per cent of Aussies were in a position to live off their savings for four months or more if they lost their source of income, she said.

And startlingly, 16 per cent - or about two million - are living day-to-day, in precarious positions where they could only survive for a week if they lost their jobs.

Some big issues combine to make a kind of financial insecurity perfect storm - low wage growth and the growing issue of underemployment.


Wage growth has collapsed and remained flat for five years.
Wage growth has collapsed and remained flat for five years.


Each year for the past five years, the annual increase in average weekly earnings has been below 2 per cent. That's half of what economists say is the accepted norm.

On top of that, new data released by the Australian Bureau of Statistics shows more than one million people are underemployed.

At the same time, cost of living pressures have exploded, with households forking out more for accommodation, utilities, groceries and petrol.

"Mortgage stress is pretty rampant as well," Ms Hassan said. That's when more than 30 per cent of your income goes towards your home loan.

"A lot of people fall into that bucket, particularly those in capital cities and, especially, in Sydney.

"Even with interest rates falling, which helps, it's still a big chunk of people's take-home pay and it can be hard to have enough disposable income when your expenses are growing."

The ABS data shows 526,000 of those who are underemployed are looking for full-time work, while another 492,000 want more hours from their current jobs.

Ms Hassan said an emerging trend was people turning to the "gig economy", doing odd jobs or freelancing in order to earn more.

"It's definitely a trend, people looking at side hustles to make extra cash," she said.

According to research by life insurance provider TAL, half of Australians hold some form of life insurance, but many are underinsured.

And 11 per cent hold income protection insurance to keep money coming in should they lose their jobs.

"Income protection can be very valuable for those who rely on their income," Ms Hassan said. "It provides up to 80 per cent of income in the event of injury or illness and having to stop working."