Yahoo Finance Cost-of-living misery as Aussies hit record six-figure 'average' pay
The Australian Bureau of Statistics has updated what the average wage is and it's $1,923 per week.
The average wage in Australia has hit six figures for the first time, with the standard worker now pulling in $1,923.40 per week or $100,016 per year. Many used to think a six-figure salary meant you had "made it" in the corporate world, but these days, depending on where you live in Australia, it might only be just enough to get by.
Finder's personal finance expert Sarah Megginson told Yahoo Finance many Australians are struggling to get by as financial pressures like record rent prices, high petrol costs and draining interest rates contribute to the rising cost of living. This means the once-desirable income doesn't stretch as far.
"There's been no area of our day-to-day living costs that have been quarantined from rising prices," she said.
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"So I think no matter where you live, you would have been better off three years ago earning $90,000 than you are today, earning $100,000 because inflation over that time has well outpaced a normal level.
"I definitely think earning $100,000 is not what it was cracked up to be a few years ago."
Which industry is making the most money?
The Australian Bureau of Statistics (ABS) revealed this week the average salary had gone up 4.6 per cent annually in May.
For men, the average wage was $2,214.70 for those in the public sector and $1,978 in the private sector. Women earned an average of $1995.30 as public servants versus $1698.40 in the private sector.
The ABS also revealed which industries were pulling in the biggest bucks:
Mining: $3,015.30 per week
Information media & telecommunications: $2,437.20 per week
Financial & insurance services: $2,283.20 per week
Professional, scientific & technical services: $2,245.40 per week
Electricity, gas, water & waste services: $2,243.80 per week
Public administration & safety: $2,036.10 per week
Education & training: $2,026.40 per week
Health care & social assistance: $1,902.40 per week
Transport, postal & warehousing: $1,893.20 per week
Construction: $1,821.80 per week
The important aspect to note about 'average' salaries
It's worth mentioning the difference between average and median when it comes to wages.
The ABS has calculated the average salary based on all the wages that are available, and, considering there are some Aussies who earn a lot of money, that can push the official number fairly high.
The median wage, on the other hand, is the middle value in a set of data and it's a fairer reflection of Aussie salaries because it eliminates those ritzy outliers.
According to ABS figures released earlier this year, the median Australian wage is $1,300 per week or $67,600 per year.
For men, the median is $1,509 per week or $78,468 per week, and for women, it's $1,130 per week or $58,760 per year.
"I think that's just really fascinating to keep in mind," Megginson told Yahoo Finance. "A lot of people could see this and think, 'Oh my gosh, the average wage is six figures. Does that mean because I'm earning under six figures, I'm well behind the average', and that's not the case.
"Most Australians are living with a wage that's well under that six-figure point. So I think that's a really important distinction."
How your salary can impact your lifestyle
Living in an expensive suburb in Sydney could mean your six-figure salary doesn't travel very far. It could be a very different story if you were residing in a regional part of Australia and only paying a few hundred dollars a week in rent.
But Megginson added that "lifestyle creep" can get in the way of people using their money effectively.
Lifestyle creep is when your salary goes up, so does your spending, which can make you feel like there's never enough money in the world to survive.
"As your lifestyle gets bigger, your expenses and your obligations get bigger," she told Yahoo Finance. "Most people think the more I earn, the better, the better I'm going to feel, the more financially secure I'll feel. But that lifestyle creep can mean you just upgrade your expenses."
So what's considered rich if $100,000 is average?
This depends on who you ask but in a world where $100,000 is average, a rich lifestyle is well above that mark.
Finder research revealed that Millennials needed the most money to feel rich at $418,325 per cent, followed by Gen Z at $392,077.
Baby Boomers were the most conservative in their rich estimates and believed you needed to earn above $273,812 per year, while Gen X was in the middle ground with $307,257.
Those figures averaged out to be $345,819, which is three and a half times the average wage and more than five times the median salary.
"If we did this research 10 to 15 years ago, I think just hitting $100,000 would have felt like, 'Oh, you've made it'," Megginson said.
"I think there's a real recognition now that $100,000 sounds nice, but once you pay for your living costs, there's not necessarily going to be a lot left over depending on where you are and what your lifestyle costs are."
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