Imagine earning a six-figure salary as a lawyer, yet still struggling to put food on the table. This is the stark reality for many middle-class Australians today, as the cost-of-living crisis tightens its grip on households across the nation. Jess Townsend, a lawyer earning $90,000 annually, finds herself in this very predicament. Her grocery cart is filled with budget-friendly, home-brand products, and red meat is a luxury she can’t afford. Despite these sacrifices, she’s unable to save and has even relied on a food bank in the past year. But here’s where it gets even more alarming: Townsend isn’t alone. A growing number of middle-class Australians are teetering on the edge of financial instability.
‘It’s not about lattes or manicures,’ Townsend explains, addressing the common misconception that small indulgences are to blame. ‘I cut out all luxuries—I do my own hair, skip makeup, and stick to the bare essentials.’ Yet, it’s still not enough. A recent report from Food Bank Australia reveals that one in five households earning $91,000 or more experienced food insecurity in the past year, a slight improvement from 32% in 2022 but still a staggering figure. So, what’s driving this crisis?
AMP chief economist Shane Oliver points to a stark disparity: while grocery prices have surged by 21% since 2020, average wages have only risen by 16%. ‘People are forced to make tough choices,’ Oliver notes. ‘And often, it’s food that gets cut.’ Essential items, from housing to energy, have seen even sharper increases, disproportionately affecting middle and lower-income earners. Meanwhile, higher-income households have managed to maintain their spending power, leaving the middle class to bear the brunt of the crisis.
But here’s the controversial part: Is this simply a matter of individual financial management, or is the system itself failing the middle class? Consider this: exclusive data from real estate firm Cotality shows that in no Australian capital city can someone earning under $100,000 afford the median rental or mortgage without spending over 30% of their income. In Sydney, for instance, you’d need to earn around $230,000 annually to comfortably afford a median-priced home. ‘The housing market is out of whack,’ says Eliza Owen, Cotality’s head of residential research. ‘A median-income household should be able to buy the median dwelling, but that’s far from reality.’
And this is the part most people miss: the generational divide. Research from the Productivity Commission highlights that those born in the 1990s are the first generation to not outearn their predecessors by their 30s. Meanwhile, nearly 1 million Australians now juggle two jobs just to keep up with living costs—a 22% increase since June 2021. Take Josh*, a Sydney resident with three jobs and a combined income of $80,000 to $90,000. Despite his relentless work ethic, he relies on food pantries to make ends meet. ‘I feel like a clock running down,’ he admits. ‘No matter how hard I work, nothing improves.’
So, what’s the solution? Some argue for systemic changes, such as addressing housing affordability and wage stagnation. Others believe individual financial discipline is key. What do you think? Is the middle class being unfairly squeezed, or is this a wake-up call for better money management? Let’s spark a conversation—share your thoughts in the comments below.
