2012 vs 1984: Young adults really do have it harder today

[JHikka]

Graduating from university this month, luckily with no student debt. However, I have hardly any money to my name as of typing this, and there aren't any real job prospects for myself in this province to consider, let alone buying a house or other large-scale things.

[Doug]

Originally Posted by someone123

How long ago was this? The tuition you paid for two degrees is less than the cost of two terms of five courses was for me.

I went to school in an expensive province but I had no choice -- it was expensive tuition at home or a higher cost of living in another province.

BSc: 1988 - 1991 (ON and AB) - total tuition ~$5,000
MBA: 1991 - 1992 (AB) - total tuition ~$1,000

[shreddog]

An interesting debate no doubt, but one that has always raged ... today's graduating class has always had it easier/harder than those that graduated a generation ago ... it all depends on your perspective.

That said, there are certainly some differences between today and 20+ years ago. I recently hired 3 new grads, all in engineering degrees and all 3 have very different situations amongst themselves and when compared to my siutuation when I first graduated in '83. One big difference though is their desire (all 3) to buy a home ASAP.

When I graduated, I had one of the highest starting salaries and little debt yet I still didn't really expect to buy a home for about 4-5 years mainly because it was expensive and I wanted to save as much as possible.

So the question I have for all the recent/soon to be grads ... when do you honestly expect to buy a home .. 1-2 years after graduating? in your late 20's? in your 30's? never??

[someone123]

Originally Posted by Doug

BSc: 1988 - 1991 (ON and AB) - total tuition ~$5,000
MBA: 1991 - 1992 (AB) - total tuition ~$1,000

Isn't this the point of the article? Your bill would be substantially higher today. Instead of ending up with $18,000 in the bank now you would likely end up breaking even, or worse.

The average tuition for an MBA is around $20,000 in Canada. Maybe you can get scholarships (I got paid for grad school but I did an M.Sc. -- I'd assume there's less funding for a professional degree) but that's never an option for the majority.

[drew]

Originally Posted by SHOFEAR

I belief most people who cant afford to enter the housing market aren't making the same sacfrices to save money that people were a generation ago. Camping has been replaced by yearly all inclusive trips to Mexico and weekend parties in Vegas. Growing vegetables like Potatoes, tomatoes, etc in gardens has been replaced by eating out multiple times a week. Lavish entertainment sytems and electronics are something people were willing to live without.

It's certainly not the same with everybody, but from my experiences it's the case.

This is true to some degree, but I would argue that air travel has become MUCH more affordable between now and 1984. Also, all inclusive can be had quite inexpensively, and also this option didn't exist back in 1984.

When I was a kid in the 80's, our family trips were always road trips. We didn't fly anywhere. Air travel was a luxury then, certainly not like now.

Also, I would assume that produce costs have come way down relative to 1984, and selection has gone way up. In any event, growing your own produce may save you $20 or $30 bucks a week in modern dollars, and really over 6 months at the absolute most. When you consider the time and effort involved to grow a sizable harvest of vegetables, this has become relegated to a hobby for most, certainly not a huge money saver.

[Copes]

Originally Posted by shreddog

An interesting debate no doubt, but one that has always raged ... today's graduating class has always had it easier/harder than those that graduated a generation ago ... it all depends on your perspective.

That said, there are certainly some differences between today and 20+ years ago. I recently hired 3 new grads, all in engineering degrees and all 3 have very different situations amongst themselves and when compared to my siutuation when I first graduated in '83. One big difference though is their desire (all 3) to buy a home ASAP.

When I graduated, I had one of the highest starting salaries and little debt yet I still didn't really expect to buy a home for about 4-5 years mainly because it was expensive and I wanted to save as much as possible.

So the question I have for all the recent/soon to be grads ... when do you honestly expect to buy a home .. 1-2 years after graduating? in your late 20's? in your 30's? never??

My assumption has always been that I would buy in my mid to late twenties. I think that I will be able to do it, however that is later than my parents purchased their first home. I have friends who I don't think will be in a position to buy a reasonably nice starter home until they are 30+.

[niwell]

Originally Posted by shreddog

So the question I have for all the recent/soon to be grads ... when do you honestly expect to buy a home .. 1-2 years after graduating? in your late 20's? in your 30's? never??

Late 20s and graduated from my Master's 3 years ago and currently working (another..) contract position. I make a decent amount but with my student loan debt coupled with housing prices in Toronto means I won't be buying anytime soon. Honestly I see it more likely I purchase an income property in the form of a condo or house in an affordable area while continuing to rent in a neighbourhood I enjoy. Even that probably won't be feasible for another 5 years or so, unless my next position pays considerably more than my current (which is in the realm of possibility but I don't want to count on it).

I think my student loan debt was largely worth it though. I didn't go crazy but the thought of wasting the first half of my 20s saving wherever possible isn't terribly appealing. Did it first and second year uni and felt like I missed our on a lot.

[Doug]

Originally Posted by someone123

Isn't this the point of the article? Your bill would be substantially higher today. Instead of ending up with $18,000 in the bank now you would likely end up breaking even, or worse.

The average tuition for an MBA is around $20,000 in Canada. Maybe you can get scholarships (I got paid for grad school but I did an M.Sc. -- I'd assume there's less funding for a professional degree) but that's never an option for the majority.

My point is the growth in student debt is only partially attributable to increased tution. MD/LLB/MBA programs are not good comparisons as costs have increased far faster than those for other programs. The example I provided with my brother was to illustrate that I paid x less in tuition than he did, but he had to take on far greater than x in debt.

[drew]

Originally Posted by Only The Lonely..

An interesting article from Rob Carrick in today's Globe and Mail.

I'm turning 30 in July, have two university degrees (Computer Science and Business Admin), was unemployed for about a year after leaving school, and am now struggling to pay $260,000 on a dilapidated fixer upper that cost my grandfather $4,600 in 1953 on a meat cutters salary.

Wages at least in my part of the country (Manitoba) haven't changed at all since the 90's.

What has your experience been like?

I think a large part of this equation has to do with those who were lucky enough to get into a mortgage on their first home pre or post the real estate price jump in their respective city.

For Winnipeg this cut-off seems to be in and around 2006 or so. If you bought before this, houses were still somewhat affordable for single/low income earners. After this point in time, house prices experienced close to double digit increases year over year.

For myself, we purchased our current (first) house in Sept. 2005 for ~$130k.

At the time I was still in University completing a masters in engineering, and the entire mortgage was based on the income my then girlfriend (now wife) who is a high school teacher. I had a small amount of student debt, but nothing crazy.

Now we are 6 years later. Our house is worth more than double what we bought it for, and all things being equal, we would never have been able to afford this same house under the current market conditions with a single salary...or at least not this same neighbourhood.

[MichaelS]

Originally Posted by Doug

I have this debtate with my younger brother all the time. He ended up with $20K in student debt whereas I ended up with $18K in net savings. My total tuition over that period of time was around $6K. I completed my first two degrees in five years total while it took him five years to complete one. So assuming he averaged $4k per year, he spent aroud $14K more on tution than did I. So his finances should have only been about $14K worse than mine, but ended up $38K worse. Tutuion was only a minor contributor to the difference:
-he took 5 years to complete a 4 years degree
-he only worked during the summers whereas I worked full time all year-he lived with only one roomate in a good location, I lived with multiple roomates in crappy apartments in less desirable locations
-he bought food on campus at inflated prices, I brought my own
-he went to bars more or less every Thrus, Fri and Sat, I went to a bar maybe 2-3 times per year

The increase in student debt is mostly due to poor priority setting.

You should give seminars on time management. Very impressive you could fit in 2 degrees and a full time job in 5 years.

[patm]

Interesting read.

I'm just about finished my BA with a major in Supply Chain and frankly I've had it pretty easy thus far. Especially considering I came here when I was 3 years old with my parents in '92 as landed immigrants.

I didn't have to pay for my education as my parents paid for it (but took it on as regular debt, which is now paid off, but they are far from wealthy... maybe just crossing into the upper-middle class. MAYBE). That was roughly $5 G's a year (didn't buy many textbooks cause I'm a boss and I went to school here in Cgy) so nothing crazy but still a lot more then the inflation rate would suggest, especially as it was crappier school (MRU).

Now that I'm basically done school, I'm working full time at a small-ish O&G company making a little above the average starting wage for business grads in Alberta but I'm only on a four month student contract so job security isn't the greatest, although there are a lot of jobs in Supply Chain out there so it's not a big worry.

If I were to get extended and keep my current job at the same wage, owning a single family home in Calgary would still be quite a ways out of reach unless I got married to someone making a similar salary, however a townhouse should be doable and a condo would be no problem.

But yeah, the way I see it, getting a single family house with only an undergrad degree is impossible in Calgary unless you are a) a 2 income household or b) hit the jackpot with a job/work on-site in the patch. Even with trades, if you have your ticket and own your own company or work a lot you may make a little bit more "net" then undergrads at the same age but I still don't know anyone that can afford a home alone.

So in my eyes I don't think we really have it that bad but me and my friends all come from decently off parents and haven't had any problems getting jobs so maybe I'm just seeing some lucky people.

Actually, maybe I'm just from a lucky city.



P.S. This all goes out the window if you want to work multiple months on-site doing trades in the patch, but that's not really comparable.

[Xelebes]

Originally Posted by shreddog

An interesting debate no doubt, but one that has always raged ... today's graduating class has always had it easier/harder than those that graduated a generation ago ... it all depends on your perspective.

That said, there are certainly some differences between today and 20+ years ago. I recently hired 3 new grads, all in engineering degrees and all 3 have very different situations amongst themselves and when compared to my siutuation when I first graduated in '83. One big difference though is their desire (all 3) to buy a home ASAP.

When I graduated, I had one of the highest starting salaries and little debt yet I still didn't really expect to buy a home for about 4-5 years mainly because it was expensive and I wanted to save as much as possible.

So the question I have for all the recent/soon to be grads ... when do you honestly expect to buy a home .. 1-2 years after graduating? in your late 20's? in your 30's? never??

5-10 years. Maybe a little bit longer. I graduated with no debt though.

[manny_santos]

After I found myself unemployed at the end of last summer due to downsizing, I threw up my hands and went looking for job opportunities outside Canada, after seeing the plight of so many young people I had gone to school with - either unemployed, or working in dead-end jobs.

I sympathize with many young Canadians. Young Canadians today, in my opinion, do not have the same economic opportunities that their parents had, or that young people in other countries have. I think that the biggest challenge for young Canadians today is that there are too many older workers who either refuse to retire, or cannot afford to retire. My father fits into the latter category.

I worked for the Retail Services department at the University of Western Ontario for two years as a part-time employee while I was still studying there. It was physically impossible for any young person to get a full-time job there. All the full-time positions were taken up by people age 50 and over who had been there for decades, almost all of whom wouldn't retire. One person did retire, and her position was replaced with a part-time position filled by a student. When the student finished his/her studies, a new student would take his/her place. Everywhere one looks in Southern Ontario, full-time jobs are taken by people in their 50s and 60s.

In stark contrast, where I work in Mexico City, there's no grey hair, anywhere. Virtually everyone I see in the office complex I work in is under age 45. Where I work, the oldest employee is 37 years old, and almost all of us are in our 20s. Opportunities abound for young people there, and as university is free, there's no student debt. One friend of mine, age 27, graduated less than four years ago and he now owns a house in a gated community. He also owns a car. I don't know ANYONE in Canada age 27 or under who owns a house, let alone one in a gated community, plus a car. There also appears to be a labour shortage in Mexico City; there are numerous "help wanted" signs on almost every block along my daily commuting route that have been up for months, and the Wal-Mart closest to where I live is practically begging for staff, offering life insurance and other benefits.

What happened? How did economic opportunities for young people in Canada fall so far behind while a traditionally third-world country is now kicking our ass?

[MTLskyline]

Mexico does indeed have low unemployment (5.1%), yet people still flee in droves across the US border. It sounds as though the people who are emigrating could easily find work in Mexico if they wanted to (especially since their university education is free).

Do they emigrate because American wages are higher (even under the table)? Or is it not related to the economy at all?

[MexiQuebecois]

Originally Posted by MTLskyline

Mexico does indeed have low unemployment (5.1%), yet people still flee in droves across the US border. It sounds as though the people who are emigrating could easily find work in Mexico if they wanted to (especially since their university education is free).

Do they emigrate because American wages are higher (even under the table)? Or is it not related to the economy at all?

As a Mexican who recently got accepted for Permanent Residence in Canada (about to leave Mexico City in a few months) let me give you my perspective on this situation:

Mexico does indeed have a lot of opportunities and jobs aren't hard to find, but they're all located in Mexico city. I'm originally from Tijuana, and I moved to Mexico City to start my immigration process about 2 and a half years ago, I found a job within a week of landing and I have never been more than a few days without a job, speaking English (and a few other languages) was all I needed. I live in a great neighbourhood (Colonia Roma/Condesa, google it) and I can't complain about life. But I just told you the issue with this country; almost every single job is located in Mexico City! We're talking about a VERY VERY centralized country where, if you want to work, you have to move to the capital city, and trust me, we can all claim to be city lovers here, but living in a megacity of 21 million people in a developing country does come with a lot of disadvantages.

Yeah so you either stay in your quaint little town unemployed, or move to the Capital city, you move here and yes you have a job, but rents are relatively expensive, it's crowded as hell so the traffic is horrible, noisy, polluted, protests all the time, etc. Salaries are higher in Mexico City, but it all comes at a price.

Regarding immigration:
People immigrate for a lot of reasons (mainly economic) but the mosaic of Mexican immigrants going to the USA and Canada is very different. Those going to Canada tend to be more educated and are doing quite well in Mexico. The ones going to the USA do so because there's this notion that going to the USA means finding a job and getting rich. These people normally have family members living there so they have a safety net and these family members tell them how great it is to be in the USA (nobody wants to be seen as a loser back home, right?) This is prevalent in certain states and with people of a certain socioeconomic level.

The ones going to Canada tend to use the Skilled worker program so they're educated and do so the legal way. There's no border between Mexico and Canada, so illegal immigration to Canada from Mexico is virtually zero (especially after the visa requirements) the USA is in the middle, and if you already crossed one border, why would you bother doing it again?
In my case I finished high school in Canada and met my wife there. We started comparing whether to live in Mexico or Canada and the latter came out the winner. Reasons? Mainly stability. Here in Mexico there's no pension plan provided by the government (you save your own money) and the education is horrible, also more opportunities for my future children, lower crime rates, less corruption, and a huge ETC.

Also funny how all foreigners keep on mentioning the great education system in Mexico because universities are free. Yes they're free, but here's the catch: You only have one "admission pass" which we call a "ficha" meaning that when you're in high school, you have to take a very difficult exam, and only a certain percentage of those who took the exam will gain a spot to enter university. So let's say that UABC (university) is taking 20,000 students this semester, and 60,000 prospective students apply to UABC, you're among them and you actually pass the exam, but another 30,000 also passed the exam, so you do qualify for a spot, but since there are too many applicants you're shit out of luck. Since you only have one admission pass this means that you can't go to university unless you apply next year or pay for a private one, which cost the same or more than your average tuition in Canada, oh and no government loans either! So you better stay with mom and dad for those 4 years, that is, if they can afford to pay for your tuition

Hope that helps

[someone123]

This article is about the Quebec student protests but really ties in with this topic as well (it's in French):

http://m.ledevoir.com/societe/educat...-a-la-maturite

The last line captures part of the refreshing perspective of the article:

C’est vraiment mal vieillir que de ne pas vouloir que les jeunes aient une meilleure vie que nous. Il faut toujours souhaiter que nos enfants nous dépassent.

[Acajack]

Originally Posted by someone123

This article is about the Quebec student protests but really ties in with this topic as well (it's in French):

http://m.ledevoir.com/societe/educat...-a-la-maturite

The last line captures part of the refreshing perspective of the article:

C’est vraiment mal vieillir que de ne pas vouloir que les jeunes aient une meilleure vie que nous. Il faut toujours souhaiter que nos enfants nous dépassent.

Yeah, what a great point. I remember one of my mother's sixty-something friends a few years ago going on about how today's women shouldn't have maternity leave because her generation didn't have it. If women want to have kids, they should just quit their jobs just like her generation did. Belle attitude! Bravo for social progress.

[kwoldtimer]

Originally Posted by Acajack

Yeah, what a great point. I remember one of my mother's sixty-something friends a few years ago going on about how today's women shouldn't have maternity leave because her generation didn't have it. If women want to have kids, they should just quit their jobs just like her generation did. Belle attitude! Bravo for social progress.

I had to chuckle as I've heard somewhat similar dismissive comments from my own mother, now in her 80's, who raised four kids before returning to the workforce.

[kwoldtimer]

Originally Posted by shreddog

An interesting debate no doubt, but one that has always raged ... today's graduating class has always had it easier/harder than those that graduated a generation ago ... it all depends on your perspective.

That said, there are certainly some differences between today and 20+ years ago. I recently hired 3 new grads, all in engineering degrees and all 3 have very different situations amongst themselves and when compared to my siutuation when I first graduated in '83. One big difference though is their desire (all 3) to buy a home ASAP.
When I graduated, I had one of the highest starting salaries and little debt yet I still didn't really expect to buy a home for about 4-5 years mainly because it was expensive and I wanted to save as much as possible.

So the question I have for all the recent/soon to be grads ... when do you honestly expect to buy a home .. 1-2 years after graduating? in your late 20's? in your 30's? never??

That seems to come through in a number of the posts and struck me as possibly some kind of generational difference in terms of expectations. In my case (class of '81), I waited twelve years to buy, finally cashing in my life insurance policy to push me over the 25% deposit that seemed to me the minimum I would want before buying.

[Doug]

Originally Posted by Acajack

Yeah, what a great point. I remember one of my mother's sixty-something friends a few years ago going on about how today's women shouldn't have maternity leave because her generation didn't have it. If women want to have kids, they should just quit their jobs just like her generation did. Belle attitude! Bravo for social progress.

My mom had similar sentiments. She had 5 kids and never took more than 2 weeks off from her full time job after giving birth. Her family is really big on the independence thing. Her mother refused to collect a government pension after 65 preferring to make a living cleaning offices.

My parents were incredibly financially conservative. They never borrowed a dime and paid cash for their first house when in their mid 20s. Even after that, they saved 1/3 of their incomes.