Australians Less Mobile, More Risk-Averse Than Ever, Data Shows

Not switching jobs. Not starting businesses. Not moving states.

People are less mobile, less dynamic and more risk-averse than we used to be, a series of economic indicators shows.

"I do think there's a lot of fear in the workplace at the moment," said business strategist Kate McCready.

Contributing to those fears are advances in artificial intelligence (AI), the uncertain global environment and a tightening jobs market.

Ms McCready has previously moved between self-employment and receiving a salary, and has just re-started her leadership coaching business after a restructure at a large health insurer made her redundant.

She was happy about the shift, but aware that not everyone is able to shift jobs so seamlessly.

"One of the biggest things is the freedom of time and the choice to choose how and when and why I work, who I work with."

All the stats say 'stuck'

In 1989, almost one in five people in the workforce changed jobs in a single year.

By 2005, the 'job mobility' rate had fallen to 11 per cent, essentially one in 10 people.

The most recent data, for the year to February 2025, the data shows just over 1.1 million people changed jobs, which means job-switching fell to just 7.7 per cent, or one in 13 people.

"All of these factors point towards Australians being stuck or being held in the jobs that they currently have," said Rachel Lee, research economist at the e61 Institute.

The cost of housing and the risk involved in taking an average mortgage, around $700,000 with a 30-year term, are just some of the factors holding us back.

But it is more than that.

'Wage jobs' have super, leave and other benefits

Rachel Lee said the security and benefits of traditional employment have become more attractive over time.

"With the expansion of things like superannuation and paid parental leave, the benefits of being a wage employee have increased," she said.

And it has changed the employment market.

Self-employment has fallen sharply to a 20-year low, according to e61 Institute research.

This is a fundamental shift in how Australians work. The share of Australians who are self-employed fell from a 2002 peak of 20 per cent to just 14 per cent of employment today. Sole traders dropped from 12 per cent in 2002 to just under 9 per cent now.

It is not a lack of people wanting to start new businesses that employ staff, Rachel Lee said, but workers increasingly choosing wage-paying jobs for greater income security.

"Fewer people are running small businesses, as wage jobs become more attractive and predictable, while the costs and complexities of setting up a business that hires and manages employees have risen," she said.

There is another issue: regulation.

How 'red tape' protects not just people, but incumbents

Economist Dimitri Burshtein, who works at Eminence Advisory, said we were "weighing down" younger generations.

The biggest asset most young people have is their time, skills and the ability to sell them.

But he said high income tax rates and regulations that impede young people from starting businesses hinder their ability to get ahead.

Many economists view regulation derisively and call it 'red tape' for the extra burden it places on business to complete and comply with.

Mr Burshtein is not a fan (saying "it's like a wet burlap sack") but for another reason.

He suggests new regulations place a disproportionate burden on businesses that haven't had to face the rules before, and provide a boost to companies already in the market.

"It just stifles innovation, it stifles movement. What it's designed for is to de-risk systems. And what that means is that we're using regulation to protect what we have, but to make it really hard to build things new."

People aren't moving interstate as much

Another measure of decreased mobility is this: we are not moving interstate as much as we used to.

Property market expert Cameron Kusher said it was a big commitment.

"There is just not enough enticement to encourage people to cross the borders. People are still moving, but they are much less likely to move to another state instead choosing to move within the state they currently live in," he said.

The spiralling cost of property — and transaction costs like stamp duty — make it harder to shift.

"High housing costs, especially in a rising interest rate environment, is a big reason why people don't change jobs, don't start business and don't move to another state," Cameron Kusher added.

Budget response to cool housing market

The federal budget has taken huge swings at some of the settings that have fuelled the housing market and made the price of housing — both sales and rentals — more expensive.

Tax breaks to housing investors such as negative gearing and the capital gains discount could result in making the sector less attractive, and allowing more owner-occupiers to purchase more cheaply.

(Or if price growth simply slows, rather than there being a fall in house prices, it could become easier for people to save a deposit and buy a dwelling).

There was also some acknowledgement of the restrictive nature of regulation, with the government vowing to scrap fees of up to $1,600 to access mandatory Australian standards and to make electronic record keeping with financial regulators easier.

Safety isn't always what it seems

Kate McCready now works with people looking to do what she has done, making the leap from the security of wage earning roles into self-employment.

She ran through some 'pros and cons' of self-employment, which will be familiar to many who have weighed the move.

Some pros: independence, "uncapped earning potential", autonomy, and ability to make work fit better around life

Some cons: paying your own superannuation, missing the feeling of being part of a team and "being more susceptible to economic conditions".

In the past 40 years, we have only had two recessions, the 1990/91's "recession we had to have" and the COVID-powered one in 2020.

But Kate McCready worries that our settings — and mindset — mean we are not prepared for what might be substantial upheaval in our economy and our working lives.

"It's easy to do good work and do interesting things and so (people are) kind of underprepared for even the thinking that's required in terms of: 'Oh I might need to do something a bit different' or 'I might need to look at my career'," she said.

Just as our housing 'crisis' was the result of choices and changes over decades, making our economy more dynamic — and encouraging more people to take chance in their working lives — will not be fixed overnight.