An Australian worker has sparked a 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 about trying to create a pathway to a $100,000 salary.”
“I felt like it was necessary to be able to live middle class (but) I would say inflation and housing affordability pushed that to $200,000.”
According to official figures, the median annual salary for Australians in 2022 was $65,000 per year.
The Australian added: “Now, in your late 30s, I suggest you are middle class up to $300,000.”
Households with mortgages are particularly feeling the cost of living crisis after a series of rate hikes by the central bank (stock image)
Opinions differed on whether this salary was considered a middle-class salary, but most agreed that the cost of living for households had increased significantly.
“It’s amazing how just ten years ago my wife and I could get by on $70,000 or less,” one person said.
“Now, at around $250,000 in an average cost of living area and having learned a lot more, it seems like we are just able to afford everything we need.”
Another agreed, saying, “My wife and I did well on $85,000 10-15 years ago. Now we’re at $200,000 and what the extra $100,000/year really gave us was more stability.
However, one said: “$100,000 is a lot of money. How many things do you need?
“Yes, $200,000 is more than the vast majority of the world’s population earns,” another agreed.
“The key is to always live below your means. It’s amazing how well you can live when you don’t have huge car, phone, or mortgage costs twice as much as you can actually afford.
Another said, “$100,000 is probably good for an individual, but for a family $200,000 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 give you $200,000 in family income. 200,000 households are MORE than enough everywhere except in big cities.
“But cities are rapidly losing their appeal, mainly because the cost of living is no longer worth it, and as things get further and further away, anyone who can is just leaving.”
A sixth said: “I agree, but obviously a lot depends on location. In most fields where a 200k salary is possible, I think you’re right.
“Remote working opens the door a little bit, so if you’re in a relatively cheap rural area but you’re working remotely between 100,000 and 150,000 people, you could live very well.
Meanwhile, a seventh said: “As a single income, $200,000 probably keeps you in the middle class simply because most will spend more on living a better lifestyle, e.g. on travel, housing individual occupancy, restaurants, etc.
“A couple making $200,000 each ($400,000 combined) definitely pushes you above the middle class assuming an average of 2.5 children without mitigating medical costs.”
Another said: “I agree, back in the 90s when I was a kid $100,000 was a lot of money, like a nice house, a big RV and a boat.”
“Now $100,000 is relatively comfortable, you can afford a decent apartment and put money aside at the end of the month.
“If my partner and I both earned $200,000, we would easily be able to own a home and invest heavily in retirement, so yes, I agree.”
The Reserve Bank’s series of interest rate hikes have hit Australians with mortgages particularly hard, increasing monthly repayments by thousands of dollars on average.
These households generally fall in the $100,000 to $200,000 income range, with lower incomes less likely to purchase a home and higher incomes likely to have paid off their mortgage.
Property prices have stabilized somewhat, but the tight rental market continues to push rents upwards.
This month’s inflation figures were pushed slightly higher by rising gasoline prices, but it is likely that not enough to encourage the RBA to raise interest rates again.
The Consumer Price Index (CPI) for August stood at an annual rate of 5.2 percent, compared to 4.9 percent in July.
The annual growth of the indicator, which tracks the cost of purchasing the same basket of goods and services over time, was in line with market forecasts.
Most observers expected a further rise in inflation after the rise in prices at the pump.
Automotive fuel prices rose 9.1 percent in August and 13.9 percent year-on-year.
Besides fuel prices, which fall under the broader transportation category, housing, food and insurance were the other main drivers of the annual increase.
The overall housing category moderated slightly, with new home prices recording their smallest annual increase since August 2021, reflecting falling construction material costs.
However, the tight rental market has led to an increase in rents.
Treasurer Jim Chalmers believes the peak of inflation is behind it.
“Even if inflation remains higher than we would like for longer than we would like, it should continue to moderate over the coming year,” he said.
Inflation was the government’s main priority to limit increases in electricity bills, he said.
Treasurer Jim Chalmers said the peak of inflation had passed and prices were expected to stabilise.
Shadow Treasurer Angus Taylor said The government should do more to rein in spending and reduce inflationary pressure, he said.
“Labor must treat inflation as their priorities one, two and three,” he said.
EY senior economist Paula Gadsby said the Reserve Bank was likely to ignore the fuel price rise, given it was expected and mentioned in the minutes of the last bank board meeting. administration, but that inflation in services would persist as a risk factor.
The data still proved close enough to the RBA’s own forecasts to keep interest rates unchanged in October, she said.
“But the Reserve Bank will be ready to intervene if productivity fails to improve and services inflation remains more persistent than expected,” she said.
“The risk of a further rate rise remains, but our main expectation is that the Reserve Bank remains firm.”
The quarterly inflation figure, expected at the end of October and after the next interest rate meeting, will give the RBA a fuller picture of the inflation challenge.