Economic Insecurity as a Wicked Problem: Novel Insights from a Latent Class Analysis of a Wicked Problem Survey

Economic insecurity remains one of the leading forms of wicked problems facing policy makers, both in Australia and internationally. It has been linked to the rise of populist parties on both the left and right, has driven record low support for major parties in Australia, and is almost always ranked as the key issue facing voters during election season. As a wicked problem, economic insecurity has multiple causes and dimensions, has structural origins due to the nature of our political-economic system, and it is interconnected with other policy choices. It manifests in the Australian economy through significant policy dilemmas including the cost-of-living crisis, housing affordability, and job security concerns. Solving any of these issues through policy will likely require significant political capital and policy legitimacy, and indeed, no objective, technical solution may exist. For example, even moderate efforts such as the recent reforms to negative gearing have cost the government significant political capital. The political reality is that economic insecurity policy choices have a normative component that requires high levels of public buy-in. Understanding how different groups of people conceptualise economic insecurity is thus a key first step in creating policy aimed at addressing it. In this paper, we seek to understand how different groups conceptualise economic insecurity as a wicked problem. Unlike existing studies that examine economic concerns from a variable-centred perspective, we adopt a person-centred approach through the novel use of latent class analysis to identify unique profiles of economic insecurity based on respondents’ rankings of their concerns. Our approach allows us to map economic concerns from the public's perspective, enabling policymakers to create policy solutions that are responsive to the distinct configurations of concern held by different population groups. Data for our analysis comes from the Flinders Wicked Problems 2025 survey dataset, which contains a nationally representative sample of nearly 30,000 Australians. We find compelling evidence for five distinct classes of people displaying unique combinations of economic insecurity indicators, which we term the economically secure, the crisis, the inflation-squeezed, the housing-squeezed, and the triple precarity group. We then extend our analysis by looking at socio-economic predictors of class membership. This process offers important insights into who is most represented in each group and how each group views and ranks different dimensions of economic insecurity. Our study makes two key contributions to the literature. First, we show how people configure their economic concerns, which allows us to directly observe how each dimension of economic insecurity relates to the others for different categories of people. Second, we examine predictors of latent classes. This provides a better understanding of the demographic, social-economic, and geographic makeup of each class. Our findings also make an important contribution to practice. When developing policy for wicked problems such as economic insecurity, we show how using latent class analysis can lead to more efficient, effective, and politically responsive policy making by helping policy makers better understand who will be most impacted by their proposed interventions.