One Thing Baby Boomers Are Right About Millennials

The generation wars always seem to boil down to this one topic – and it turns out the baby boomers might just be right.

In the battle between Australia’s different generations, commentary on both sides of the debate sometimes devolves into hyperbole and painfully overused clichés.

For those participating in the intergenerational conflictmany would have heard how smashed avocado on toast is the real culprit of the lack of affordable housing and how Boomers bought their homes at about the same price as a packet of crisps and a Mars bar costs today.

Like most hotly contested societal battles, there is truth in the hyperbole on both sides of the debate, with exactly how much truth there is depending on the eye of the beholder.

But what does the data on restaurant spending say today compared to 40 years ago?

That’s what we’ll explore in this article – how spending habits have changed, the impact of that on the economy, and how the composition of the economy has changed over the past four decades.

Back to the 1980s

Over the past 40 years, the composition of the Australian economy has changed enormously.

Where once there were factories across the country producing everything from cars to fishing reels, there are now gyms with personal trainers and baristas making coffee in virtually every suburb of the city.

When you look at the data, it really shows.

When comparable records began in 1983, spending on takeaways, restaurants and cafes stood at 0.68% of GDP. By halfway through our data set in 2002, that figure had more than doubled to 1.4% of GDP.

Finally, in an impacted confinement in 2021-2022, it had more than tripled its original size as a proportion of the overall economy, to stand at 2.33% of GDP.

Although this point relates to older Australians based on the data, it is an economy-wide measure and not just indicative of the consumption habits of young Australians.

The economy has changed

In 1990, value-added manufacturing accounted for about $1 of every $7 generated by the national economy in terms of GDP (13.8%).

At the time, Australia wasn’t quite what you would consider a manufacturing powerhouse comparable to Japan or Germany, but it could certainly hold its own and produce all kinds of goods for domestic consumption.

This level of self-sufficiency and manufacturing output is a distant memory.

According to the latest comparable data from the World Bank, the manufacturing sector now represents only 5.65% of GDP, or about 1 dollar out of 18 dollars generated by the national economy.

Whereas once Australia could be considered at least in the same range as the United States or Britain, some of our immediate rivals in terms of manufacturing as a percentage of GDP are now countries like Botswana and the Eritrea.

Naturally, this has radically changed the composition of the economy, where manufacturing was once an engine of economic growth, it has been supplanted by mineral exports in terms of GDP and the service sector for jobs.

Clichés and the economy

As the data has shown, Australians are indeed spending a greater proportion of national income on things like eating out. In this, older Australians are probably right – some households could be more cautious and live a little more frugally.

However, there’s an “if and but” to following this particular statement and it’s a big one.

Over the past few decades, particularly since the start of the pandemic, the economy has become increasingly dependent on consumer spending to drive growth and create jobs.

This may be characterized by some as randomly buying cr*p and spending too much on eating out, but for better or worse, it was the economy that was created that generated the highest unemployment rate. lowest for decades.

One could certainly argue that excessive consumption is bad for the planet, but as we’ve learned over the past couple of years, these things can’t be turned on or off without consequence, even if we wanted to.

Older Australians may be right to re-examine our lives to spend our money on what really matters to us, but at the same time we need to be wary of the consequences this could have if we were to collectively follow their advice.

Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator

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