Article: In Australia, paying rent is almost a luxury for essential workers

Compensation & Benefits

In Australia, paying rent is almost a luxury for essential workers

Australia's essential workers face a housing crisis, with average rent taking up two-thirds of their income, according to a new report.
In Australia, paying rent is almost a luxury for essential workers

During the pandemic, essential workers, such as nurses, cleaners, caregivers for children or the elderly, supermarket packers and cashiers, police officers, firefighters, garbage collectors, and many more, kept the world going while the rest of us were confined and frightened, trying to avoid contagion. However, paradoxically, they are the ones who now face the risk of exclusion, being left out of a vital right: housing.

The "Priced Out" report in Australia shows that essential workers find it very difficult to access housing, with the average rent representing two-thirds of their income, which forces them to leave their communities and contributes to staff shortages in various areas of the country. The reason is that many cannot afford to move to the most understaffed areas of the country, and some, especially those in aged care, leave the profession for higher paying jobs.

Essential workers lose money to rent increases 

Essential workers spend at least half of their income on rent. Many spend between two-thirds and three-quarters of their income on housing, leaving them with very little to meet other essential expenses.

Early childhood educators, caregivers for the elderly, and cleaners are the group most affected by this situation, spending over three-quarters of their income on rent, leaving them with only about AU$20 a day to cover other necessary expenses.

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For instance, a worker in the hotel and catering or meat industry would have to spend 81% of their salary on housing to pay the average rent of $572 per week in a capital city, while the percentage for a worker in elderly care would be 77%.

Over the past three years, average unit rents in Australia have increased by 31%, rising from $372 per week in March 2020 to $489 in March 2023. This means that essential workers are losing an average of six hours of their weekly income, which is 37 days a year, in rent increases.

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Severe financial stress

According to the study, essential workers in single-person households are likely to be in severe financial stress, with little or no savings cushion, while workers in couple households are likely to be financially dependent on their partner's income. The most expensive rents are in Sydney, where they are twice as high as the incomes of the most highly skilled essential workers, such as paramedics, firefighters, and teachers. In this capital city, other workers earning less can spend their entire salary on rent, which is clearly unsustainable. The study suggests that in all regions of the state, a typical rent-paying essential worker would be in a situation of "rent stress."

The government has promised to deliver 20,000 social housing units over five years as part of its Future of Australian Housing Fund in response to the crisis. However, experts believe that this measure is not enough, as at least 25,000 social housing units would be required each year to end the deficit.

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Topics: Compensation & Benefits

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