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#1 flowerrose

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Posted 28 June 2013 - 03:19 PM

I have been reluctant to start this thread in case it goes pear shaped, but this place has been so quiet recently, here goes nothing!

A little while ago a friend was commenting on how rich a friend of hers is because of her husband's income. I felt that, as a sole income, with two kids and mortgage, they would be comfortable but certainly not super-wealthy. The husband is in a similar position to me, in a similar firm but less experienced in his area. Knowing what I do about the industry it was clear that my friend had over-estimated the husband's income by $150-190k. My friend wasn't having any of it, insisting that I must be underpaid. When I told her my actual income she said "That's pathetic when the average Australian income is $120k a year!" I was pretty taken aback. My salary, when working, feels a far cry from pathetic. In any event, I was only loosely basing my assessment on my own income; legal salaries are pretty transparent - an employed solicitor in private practice can basically expect to earn 1/4 of their target budget, salary surveys are published online and in industry bulletins and my husband recruits people at my level and gives me the inside track on any significant shifts in the market.

What shocked me most was her statement about the average income in Australia, which led me to look it up. I came across THIS BLOG ARTICLE

As well as answering my query with both the mean and median incomes, I thought it raised some very interesting points about tilted perceptions about income (which seem to be particularly rife in mining boom WA). Turns out I was right about my friend's friend. Unless for some reason he had managed to secure a package earning more than the equity partners, they would have a net household income somewhere in the middle of the range. I hear stories all the time about cleaners on mine sites being on $150k with a FIFO package, yet I also read that FIFO geologists are cutting their contracts from $140k to $120k in leaner times. Surely the two don't tally? Another friend claims to earn a lot more than me as an admin assistant. It all seems to feed the bubble that everyone is wealthy, there are no problems and social/financial inequality is a thing of the past.

The thing about perceptions really resonates when talking about accessing private services. When I was growing up there was never any question about my receiving treatment privately or going to private school. My parents, both managers in the public sector, simply couldn't afford it. The prospect of whacking out half to a quarter of our household income, or the equivalent to a second mortgage on school fees wasn't even entertained. Similarly I waited several years for a much needed tonsillectomy, losing countless school hours in the meantime (I also had to walk three miles in the snow with no shoes for a loaf of Hovis but that's a different story wink.gif ). Nowadays the question seems to be how it can be afforded rather than if.

It has me wondering how and why we have changed so much in that respect. Is it down to perceptions and expectations or is there a wider issue at play here? Is it just a UK/Australia thing? (I don't think so, I think it just happened sooner in Australia). I'm not asking members to state where they sit in the scheme of things. I'm just interested to see if the perceptions are accurate - about your own circumstances and about the population.

#2 Guest_Windsor_Guest

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Posted 28 June 2013 - 04:16 PM

I don't really know what to reply other than I wholeheartedly agree. I guess we 'feel' like our own particular circumstances reflect those of the 'average' Australian household because it's harder to imagine people not like us. Our own money choices/priorities may also lead to us feeling like we're doing it tough when we're not.

I don't think any of the income cutoffs for various things outlined in the May Budget are particularly unfair, if you're earning $90k then you ARE earning above the average wage which means there are a lot more people doing it tougher than you whether you appreciate that thought or not. (And FTR, I used that figure as that's what were approx on now that I'm not working again, took a lot to explain to DH that even though we're cutting back in several areas we still earn way more than the average household and he needed to harden up).


Always fun to read through the comments on News.com.au when these type of articles come out though!

#3 Lemon

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Posted 28 June 2013 - 05:18 PM

I think I would have laughed in your friends face if she'd told me $120,000 is the average income tongue.gif

I have never really made an effort to find out what the actual average income is, have just believed what I've heard on the news blush.gif Which has been around $75,000pa. DH and I have always been on well below that (going on our individual incomes when we were both working) we are still on less than the average mentioned in the blog link now, given we are back on one wage. I would say yes, we are struggling, and I can't see us being able to buy our own home in the next few years, but we are coping. I wouldn't call our income "pathetic" by any means, we have more than a lot of others, so find it quite offensive when someone says $120,000 is pathetic.

I think a lot of people, like me, don't actually go to the effort to find out what the average actually is, so we just go by what we and the people we know earn (family and friends) so I can kind of see how your friend came to her conclusion of the average wage. If most of her friends earn that kind of income, it would seem like the average to her. It is pretty short sighted though! In our circle of friends and family (we are all very open about how much our incomes are for some reason!) there are probably 70% on higher incomes than us and 30% on lower incomes than us.

As for the question about accessing private services, there does seem to be a lot of *how* to afford these things rather than *if* you can afford them. I have noticed it a lot lately with private schooling etc. Like you, there was never a question of us going to private school etc growing up. When I needed braces we couldn't afford it, so I didn't get them. I guess some of it is preferences though, private schooling is obviously a priority for some, so for them, missing out on other things in order to pay for school fees is just how it is. Though it really seems to be a lot more common lately, so maybe it is a generational thing?

ETA Completely agree with your second paragraph Windsor. I think with those things naturally our first response is how it affects me, but if we think about it outside ourselves, there are always others doing it a lot tougher than us, and really, the governments first responsibility should be to help those people before the middle class. The example that springs to mind is the dropping of the baby bonus to direct funds to the disability support scheme. It irritates me to see people complaining that they will miss out on the cash from the baby bonus. Surely it's not hard to understand that those living with disability need that money so much more? FTR I will lose out with the scrapping of the baby bonus as we haven't started our family yet, and I won't benefit from the disability support scheme in any way. I just feel like people don't think about those less fortunate enough at budget time.





#4 Gretch

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Posted 28 June 2013 - 05:38 PM

I don't know that I have many perceptions as it's just not something I think about much, let alone discuss with others (outside of my husband). I would never dream of speculating about someone’s income with a third party – rude much?

I live in an area with both the financial haves and have-nots. Lots of unskilled miners earning big wages (for the moment; I remember the downturn in the 90’s that will hit again eventually) and lots of people living below the poverty line. This gives me a pretty realistic idea of where we sit in the scheme of things I think.

We are educated professionals living in a country with a stable (for now) economy - we are going to be ok. smile.gif

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#5 flowerrose

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Posted 28 June 2013 - 05:59 PM

QUOTE(Windsor @ Jun 28 2013, 02:16 PM) View Post

I don't think any of the income cutoffs for various things outlined in the May Budget are particularly unfair, if you're earning $90k then you ARE earning above the average wage which means there are a lot more people doing it tougher than you whether you appreciate that thought or not.



QUOTE(BlueBug @ Jun 28 2013, 03:18 PM) View Post

ETA Completely agree with your second paragraph Windsor. I think with those things naturally our first response is how it affects me, but if we think about it outside ourselves, there are always others doing it a lot tougher than us, and really, the governments first responsibility should be to help those people before the middle class. The example that springs to mind is the dropping of the baby bonus to direct funds to the disability support scheme. It irritates me to see people complaining that they will miss out on the cash from the baby bonus. Surely it's not hard to understand that those living with disability need that money so much more? FTR I will lose out with the scrapping of the baby bonus as we haven't started our family yet, and I won't benefit from the disability support scheme in any way. I just feel like people don't think about those less fortunate enough at budget time.


That was one of the interesting things that came from the research behind the blog post (I seriously have nothing better to do with my time blush.gif ), the contradicting public opinions regarding wealth and redistribution.
1. 86% of Australians believe that the gap between the rich and the poor is too large; but
2. Less than half (42%) of those 86% supported policies facilitating the redistribution of wealth.

It seemed, from the research, that the tilted perceptions were also playing a large hand here. As most people perceived themselves to be in the middle bracket, proportionately more people felt they stood to lose more than gain with any such policies.

I think it is sad how blinkered people can be - regardless of any interest sitting behind it. I hate the funding lottery at play for kids with special needs, the (mostly easily avoided) disenfranchisement of disabled people and that good quality healthcare and education is not equally available for all. I would happily pay a lot more tax to support any initiatives to reddress the balance.

#6 marion

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Posted 29 June 2013 - 12:18 AM

I can't comment on the 'average salary' thing as I remember it $120k p.a puts someone in the top 5% of earners. So your friend has a very skewed view of earnings. I've encountered this recently though when a relative refused a salary of $300k per annum despite having no tertiary qualifications and having had a single track career to date because 'everyone I know earns $500k' rolleyes.gif . Unsurprisingly he remains employed in his former role on significantly less than either figure and he hasn't had anyone barging down his door to offer him $300k since.

There is also a huge difference between earnings and wealth. There are people who earn loads and have nothing/ are still building their wealth and plenty more who don't earn a lot on paper but who are sitting on considerable wealth and reaping a bunch of perks at a huge expense to the taxpayer.

On schooling, there are so many people banging on these days about the deep personal sacrifices they make in order to 'prioritise education' in the form of private school fees that one can hardly be forgiven for thinking that it's some sort of moral failing to send your kids to a public school. You're either not making enough sacrifice or you haven't prioritised education. Nobody can bear to admit that there is wealth disparity which puts some people's choices outside the reach of others (or that *gasp* some people prioritise their kids education by engaging in their local school community).

#7 jantastic

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Posted 29 June 2013 - 06:35 PM

I have no illusions about our incomes. I know we are extremely lucky, both in the public service and on good wages. I didn't get the baby bonus or parenting payment due to being in a very unlucky 6 month period laugh.gif it sucked as everyone else we knew had received one or the other but we didn't need it.

My DH is not as aware of how well off we are. It can be embarrassing.

When i was young we went to a Catholic school - but mum and dad basically paid next to no fees. I am another that needed braces but was told that "wonky teeth build character". I missed out on a lot of things and wore second hand clothes a lot. I remember being jealous of people who had their own books instead of just library books, or my friend who had not one but TWO barbie dolls. I struggle not to spend a lot on DS and I think that it is partly because of that.

We had a rough couple of years when DS was born but that was our choice as we made a decision to spend any amount on his early intervention program. We are very lucky that we had that option, we were on some public waiting lists for a long time in the meantime. But, as I said it was 100% or choice to spend that money.

To be honest, I'm like FR in that I would happily pay more tax to support people with disabilities but I do admit to begrudgingly paying tax to support middle class welfare. (Sorry).
This really started when I discovered that children with spina bifida and hydrocephalus receive no funding until school age. What about early intervention? When I started to hear stories of people who are missed by our system and desperately need help I became a lot more critical of end of year vote buying ftb bonuses.
I think the sense of entitlement to welfare these days is shocking.

Oh in my MBA class we had to discuss NDIS and welfare. The majority of the clad were happy with the current welfare payments as they stand but are against the NDIS. Not really sure what that suggests or really if it is relevant to this thread but it came to mind.

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#8 Guest_Windsor_Guest

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Posted 29 June 2013 - 07:42 PM

QUOTE(marion @ Jun 29 2013, 12:18 AM) View Post

... (or that *gasp* some people prioritise their kids education by engaging in their local school community).


If ONLY there was more of this I think many more 'mediocre' public schools would be great public schools! There really is an expectation in many parents I come into contact with that they send their kid to school, school sorts out everything with little to no involvement from home because 'we're all so busy'. I guess that mentality is linked to the entitlement mentality too...

QUOTE(jantastic @ Jun 29 2013, 06:35 PM) View Post

I am another that needed braces but was told that "wonky teeth build character". I missed out on a lot of things and wore second hand clothes a lot. I remember being jealous of people who had their own books instead of just library books, or my friend who had not one but TWO barbie dolls.


DH and his eldest sister got braces, his parents didn't have the $$ for them for his youngest sister so she missed out. Now as an adult she wants it fixed, it's quite involved and expensive now because of the time delay but they are in a position to help her with the cost. Just the way it worked out.

I remember shopping at op shops for clothes with my mum, why buy new when there were perfectly good second hand options around.

#9 chelley

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Posted 11 July 2013 - 02:20 PM

Hubby and I were commenting the other day that being teachers and nurses we have never worked in office environments where salary is negotiated. We have pay scales and the number of years of service or level determines your pay, not merit.

I have no idea what the average salary is. I also have no qualms discussing what I earn. I have some friends who earn much less and some who earn so much more it makes my head spin.

I do look at housing particularly in Sydney and think"who the hell is buying these properties and how are they affording it". But hubby thinks it is just the circle we move in. We made friends at uni, those friends became our colleagues in similar professions, hence pay scales and so we remain in that circle. For our friends who earn what I consider to be a mindboggling amount - they are nowhere near the top of their circle of friends. They easily blew $90,000 on a 5 week ski trip not long ago. Without a seconds hesitation. Yep my teacher salary isn't going to let that happen lol

Private school was not a consideration for us - our choice for public education was based on our philosophy of education and community. But like jantastic we have forked out a lot on medical treatment for Raff and being in private top health cover is a non negotiable in our household.



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