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

[Only The Lonely..]

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

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

Click here to read.

I thought I would post this article because we seem to have a good blend of Gen Y, X, and even a couple of old boomers on this board.



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.



The way I see it, when i'm old enough to retire in 2049 people will be looking at me as a source of food; nevermind CPP.


What has your experience been like?

[vid]

I've had to take care of a disabled parent since I was 16 with very little help from family or the government. When my mom was my age, she had been on her own for a decade and was just about to give birth to my younger brother. My dad at 23 was going between jobs, he wouldn't get a permanent full time job until he was 27. I've had one for a year now. I got it mostly through a lot of help from some good people, though. I have been pretty lucky so far but I certainly wouldn't say life is "good".

I don't have much hope that I will ever be eligible the receive CPP. By the time I am in my 40s or whatever the cut off for the change is, I'm sure the age will be into the 70s, and I'll probably be dead by then. I'll probably never own my own home but I don't have any real desire to.

[Only The Lonely..]

Just the part on housing prices alone is enough fodder for talk..

From the article:


Region

Average Price 1984

Price Today If Homes Had Risen by the Inflation Rate Since 1984

Actual Average Price Today



Canada

$76,214 - Average home price in 1984

$154,587 - What it would be today if adjusted for inflation

$369,677 - Average home price in 2012



Vancouver

$116,444 - Average home price in 1984

$236,187 - What it would be today if adjusted for inflation

$761,742 - Average home price in 2012



Calgary

$94,154 - Average home price in 1984

$190,976 - What it would be today if adjusted for inflation

$409,750 - Average home price in 2012



Toronto

$96,078 - Average home price in 1984

$194,878 - What it would be today if adjusted for inflation

$504,117 -Average home price in 2012



Montreal

$66,116 - Average home price in 1984

$134,105 - What it would be today if adjusted for inflation

$318,400 - Average home price in 2012



Halifax-Dartmouth

$71,950 - Average home price in 1984

$145,939 - What it would be today if adjusted for inflation

$272,599 - Average home price in 2012

[MTLskyline]

Quite an interesting article.

I'm finishing up my Bachelor of Commerce (in accounting) at Concordia, and should graduate by the end of the year. Apparently this is what the job outlook was like for Concordia business grads last year: http://johnmolson.concordia.ca/en/ca...ults-june-2011

I'm aiming to go for the Certified Management Accountant (CMA) designation, which should improve my employment prospects. Becoming a Chartered Accountant is too tedious (not to mention the fact that I really don't want to work for an auditing firm).

--

My parents' house cost $78,000 when they acquired it in 1983. A real estate agent told them recently that it's worth close to $450,000. I personally doubt it's worth that much, but it is worth at least $375,000, which is quite a nice return nonetheless.

[someone123]

It is funny how whenever this is brought up you tend to hear the "uphill both ways in the snow" stories about people living in World War II or the Great Depression. It was no doubt harder back then, but there have been a couple of generations in between. It is nice to see some of the differences presented clearly in an article like this.

Many of the statistics are actually pretty misleading and in many cases are worse than they seem. For example, wage statistics are for people who worked full time. They don't capture earnings that are lost because somebody went to school full time, and a lot of the sort of people who did not need even an undergraduate degree in the past are finding themselves in university today. If you spend 4 years paying for school and then 36 years working for $50,000 you are a lot worse off financially than if you just worked for $50,000 for 40 years, but in both cases your contribution to the average wage statistic would be the same.

Unemployment rates don't mean much because they only indicate how many people are looking for work. To have a clear picture of today and 1984 you'd also need to look at participation rates.

Some other things are really hard to account for because the world has simply changed over the past few decades. What's the value of internet access? Not many people had that in 1984, let alone 1954. Some technological improvements shrink parts of the economy and make us look worse off even though they actually improve our quality of life.

I broke even with my undergrad but that was only because I chose to stay home instead of going out of province and because of scholarships. Part time work and co-op work terms made up the difference and covered tuition, books, and part of my cost of living. My last term at Dalhousie was around $3,000 for four courses.

[Doug]

Both interest and unemployment rates were in the double digits back in 1984. If you look at the total cost of carrying a mortgage, price increases are probably still above inflation but nowhere near as bad as presented. The real steals on housing were in the mid 90s coming of a recession with moderate interest rates and barely any price increases in a decade.

How much of the increase in student debt is related to tuition and how much is related to the fact that most students in recent years take 5 years to complete a degree and seem to think that does not make them laggards? Plus, how much of the debt is related to lifestyle? I laughed out loud after watching an interview with one of those ridiculous Quebec protestors whose suit must have cost a year's tuition (although in other provinces it would only be half a year's tuition).

[someone123]

Originally Posted by Doug

Both interest and unemployment rates were in the double digits back in 1984. If you look at the total cost of carrying a mortgage, price increases are probably still above inflation but nowhere near as bad as presented. The real steals on housing were in the mid 90s coming of a recession with moderate interest rates and barely any price increases in a decade.

Interests rates make a big difference if you have a mortgage, but back then it was also much easier to save up cash for a house (both because of the low housing costs and because of the high interest rates). Today in an expensive market it's really hard to buy that way.

How much of the increase in student debt is related to tuition and how much is related to the fact that most students in recent years take 5 years to complete a degree and seem to think that does not make them laggards? Plus, how much of the debt is related to lifestyle?

I don't know, but the tuition component has clearly gone up substantially. When you are just starting out those few thousand dollars per year make a big difference on their own.

[floobie]

A datapoint, I suppose:

I'm 24, have a bachelors degree in geology (graduated last June), and still live with my parents. I definitely can't afford to move out yet. Jobs for new graduate geologists have been surprisingly scarce since graduating, and what I do have doesn't pay very much... think lowest tax bracket. (Incidentally, any people with power looking for a savvy, efficient, works well with others or alone, super computer literate, self-motivating, new-ish geologist well versed in stratigraphy, structure, and sedimentary petrology?! )

I'm really not asking for a lot... just a half-decent 600 square foot one bedroom in the inner city that I own (no renting!) would be great. But, until my pay basically doubles, it's not gonna happen.

I know my parents built our house in 1985 for under $200k. It isn't big at all, but it has beautiful mountain views. The house has most recently been assessed at just under $800k. They owned one house in Calgary prior to this one, and it cost them well under $100k at the time.

So, in terms of housing... yeah, things definitely haven't gotten easier for my generation.

Tuition at the University of Calgary wasn't too bad, though. I might be saying otherwise had I not been lucky enough to have an RESP and lived at home, but at about $2,500 - $3,000 per semester, I don't think it was that high. Though, if that article is to be believed, that's well below average...

We'll see how things go for me. If my employment situation doesn't improve, I can see myself going back to school for a masters degree. Though, if I'm going to do that, I feel like I'd rather just dive head first into pure academia and work on something totally impractical but totally cool and awesome.

[PrairieGirl]

Originally Posted by floobie

A datapoint, I suppose:

I'm 24, have a bachelors degree in geology (graduated last June), and still live with my parents. I definitely can't afford to move out yet. Jobs for new graduate geologists have been surprisingly scarce since graduating, and what I do have doesn't pay very much... think lowest tax bracket. (Incidentally, any people with power looking for a savvy, efficient, works well with others or alone, super computer literate, self-motivating, new-ish geologist well versed in stratigraphy, structure, and sedimentary petrology?! )
..

We'll see how things go for me. If my employment situation doesn't improve, I can see myself going back to school for a masters degree. Though, if I'm going to do that, I feel like I'd rather just dive head first into pure academia and work on something totally impractical but totally cool and awesome.

My son just convocated with a bachelors degree in geology at the same time you did. He sent out applications like crazy and the only one that came through with a job offer was a mining company up at Thompson, Manitoba (they ended up offering him 3 positions). Son was interested in petroleum however, or working for a Saskatchewan company, and thankfully at the same time had a fellow graduate speak highly of him to his head hunter. He was contacted shortly after re a job as a well site geologist up in Northern Alberta. I think it was son's posting on his facebook page that he still hadn't got a job that caught the eye of his fellow grad (son has all the geologists that graduated with him connected to his facebook account).

Now he is saving money to pay off his education/new vehicle/etc. and building up a nest egg so he can get his masters (he has zero interest in living way up there for the rest of his life). The pay is damn good however.

Keep networking with your fellow graduates as I know Head Hunters are still looking for geologists.

Also, going by rigger high school buds of my son that post on his facebook page pleading with him to work for their company, there is quite the want/need for geologists that have English as their first language.

[floobie]

Originally Posted by PrairieGirl

My son just convocated with a bachelors degree in geology at the same time you did. He sent out applications like crazy and the only one that came through with a job offer was a mining company up at Thompson, Manitoba (they ended up offering him 3 positions). Son was interested in petroleum however, or working for a Saskatchewan company, and thankfully at the same time had a fellow graduate speak highly of him to his head hunter. He was contacted shortly after re a job as a well site geologist up in Northern Alberta. I think it was son's posting on his facebook page that he still hadn't got a job that caught the eye of his fellow grad (son has all the geologists that graduated with him connected to his facebook account).

Now he is saving money to pay off his education/new vehicle/etc. and building up a nest egg so he can get his masters (he has zero interest in living way up there for the rest of his life). The pay is damn good however.

Keep networking with your fellow graduates as I know Head Hunters are still looking for geologists.

Also, going by rigger high school buds of my son that post on his facebook page pleading with him to work for their company, there is quite the want/need for geologists that have English as their first language.

Hehe, that sounds pretty familiar. The people in my graduating class that I've since run into have been in one of four situations:

1) Unemployed
2) Working well site (and making a fair bit of money, at least)
3) Managed to get a job through their parents
4) Spent every waking minute during their degree studying so they could get a 4.0 GPA, and managed to get a job purely on that basis.

It's definitely irritating, and a little weird. I had summer student positions as a geologist the year before I even entered the program, and after my first year (which was mostly just generic first year science). Both were a piece of cake to get. After that, coinciding nicely with the beginning of the economic crisis, all such opportunities dried up. My biggest hurdle by far is simply getting my professional designation, which requires about 4 years of work experience... which is proving very difficult to get because I don't have my professional designation :p

I'm pretty sure I could get a well site job if I wanted one, but based on what I've heard, it really, really isn't something I want to do. Who knows, though... maybe I'll get desperate enough.

I've been maintaining connections with my classmates on Linkedin, and I've had a few headhunters contact me here and there. Nothing has come out of it yet, though.

Oh well. You should be proud of your son, though! He clearly did something right.

[MolsonExport]

Originally Posted by floobie

A datapoint, I suppose:

I'm 24, have a bachelors degree in geology (graduated last June), and still live with my parents. I definitely can't afford to move out yet. Jobs for new graduate geologists have been surprisingly scarce since graduating, and what I do have doesn't pay very much... think lowest tax bracket. (Incidentally, any people with power looking for a savvy, efficient, works well with others or alone, super computer literate, self-motivating, new-ish geologist well versed in stratigraphy, structure, and sedimentary petrology?! )

I'm really not asking for a lot... just a half-decent 600 square foot one bedroom in the inner city that I own (no renting!) would be great. But, until my pay basically doubles, it's not gonna happen.

I know my parents built our house in 1985 for under $200k. It isn't big at all, but it has beautiful mountain views. The house has most recently been assessed at just under $800k. They owned one house in Calgary prior to this one, and it cost them well under $100k at the time.

So, in terms of housing... yeah, things definitely haven't gotten easier for my generation.

Tuition at the University of Calgary wasn't too bad, though. I might be saying otherwise had I not been lucky enough to have an RESP and lived at home, but at about $2,500 - $3,000 per semester, I don't think it was that high. Though, if that article is to be believed, that's well below average...

We'll see how things go for me. If my employment situation doesn't improve, I can see myself going back to school for a masters degree. Though, if I'm going to do that, I feel like I'd rather just dive head first into pure academia and work on something totally impractical but totally cool and awesome.

I sympathize. It is really tough getting started...particularly breaking into the R/E market (something I was unable to do until I was 36 going on 37 years of age).

I recall living in Vancouver during the 1990s (after getting my [1994] B Comm [Concordia: hello MTL skyline!]). After 4 years of working full-time running a $15 million/year retail outlet, I still was pulling down only mid $40Ks, and I could not break into the condo market (back then, decent condos could be had for ~$160K...but the math showed that [even if I miraculously qualified for a mortgage] I would have about 4 cents in my pocket after paying mortgage + Condo fees + car payments...and interest rates could go up).

So I decided to go back to school (MSc, PhD). It also helps that I now live in a comparatively cheap city (London, Ont), especially given rather nasty student debt of myself/wife, plus cost of raising 2 kids.

[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.

[Doug]

Originally Posted by someone123

I don't know, but the tuition component has clearly gone up substantially. When you are just starting out those few thousand dollars per year make a big difference on their own.

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.

[someone123]

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:

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.

[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

[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?

[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.

[SpongeG]

i just went back to school for a career change - the wage is half of what i used to make but i like the work and it will improve with more time which is tough but worth it

what i notice about unemployment stats is they are based on people claiming EI - what about all the people who can't claim EI? like myself and a few of my coworkers laid off at the same big chop at our old place of employment - at least 5 people i worked with ran out of EI benefits and still didn't have a job, it took me a while, it took a number of people over 2 years to get a job again as well a few of us went back to school

anyway the government views these people, myself included as no longer getting EI therefore they must have gotten employed when in reality that's not the case, had to live on savings for quite a few months, quite scary times

[TallBob]

If those numbers are correct, a lot of Canadians are really falling behind. I don't know how ALL of these real-estate prices are justifiable. The experts say "Not to worry" everything is fine! Hope they're right.