Weekend Reading: Young People Are Feeling The Pinch
Life is shaping up differently for younger generations due to Canada’s rising cost of living
As a follower of Generation Squeeze, you’re probably already well aware that hard work no longer pays off for young people the way it did for previous generations because costs for things like education, housing, and child care have risen way faster than wages. We have been working to try and change this for years, and it’s been frustrating to see things worsen, despite our efforts. However, we are encouraged by the increasing attention these issues have garnered. There is more discussion than ever about the struggles that young Canadians are facing. Here are some recent noteworthy developments.
Why are younger Canadians feeling down?
A new report from Statistics Canada, Navigating Socioeconomic Obstacles: Impact on the Well-being of Canadian Youth, explores why young Canadians, aged 15-29, are becoming less satisfied and hopeful about the future.
The entire report is worth reading, but if you don’t have time, here are some notable excerpts:
“A higher percentage of young adults are choosing not to have children for financial reasons compared with older adults.”
“In 2022, 38% of young adults did not believe they could afford to have a child in the next three years, while 32% did not believe they would have access to suitable housing to start a family in that time frame.”
“Youth were more likely (60%) than those aged 40 and older (37%) to report being very concerned about their ability to afford housing or rent.”
“The high cost of housing and of everyday necessities is not only reducing the ability of young adults to meet important financial goals or being able to afford to have children—it is also leaving young adults with less money left over for leisure activities.”
It’s no wonder young Canadians are struggling, weighed down as they are with worry about affording housing, a family, and leisure activities. These worries are not just in their heads, they are grounded in fact. For example, our research shows that in 1976 it took a typical full-time income-earning Canadian 5 years to save up for a 20% down payment, by 2022 it took 17 years!
Launch of a new non-governmental task force focused on housing and climate
Earlier this month the Task Force for Housing and Climate was launched, co-chaired by Lisa Raitt (CPC MP and Minister from 2008 to 2019 representing Halton, ON) and Don Iveson (former Edmonton mayor). The non-governmental task force will call for governments at all levels to address both Canada’s housing shortage and the mounting effects of climate change on the country’s communities.
Lisa and Don were recently on CBC’s The Current, where Lisa made some astute observations (timestamp - 17:45).
“Let me talk about the future. Let me talk about whether or not our kids are going to have a place to live, let alone rent, let alone own, let alone a house, in the communities where they were brought up. Because right now, it’s not looking so good…I think this is a real issue for those of us who are fortunate and privileged to have their homes, and been beneficial to the incredible rise in the value of our homes. We have to remember that there’s a whole other generation out there, and there’s a whole bunch of newcomers coming in, who deserve to chance at this as well.”
Lisa’s right, things aren’t looking good. Many older folks have profited enormously from the same increase in home prices that is crushing younger and newer Canadians. In this case, the good fortune of one generation is a burden to the next. We thank Lisa for bringing attention to Canada’s generational unfairness problem.
An additional hurdle to homeownership: Student debt
Back in August, Abacus Data published the results of a study on the “Impact of student loan debt on homeownership in Ontario”. The main takeaway from the report was as follows.
“Over half of post-secondary graduates have incurred student debt or loans to finance their education, and, of that half, 53% are still currently engaged in repayment. On average, these graduates still owe about $14,500, with the majority anticipating completing their repayment within the next 5 years. This burden of student loan debt impedes on the ability for graduates across Ontario to allocate their financial resources towards other priorities, such as homeownership.”
Due to the rising cost of living and higher tuition students are graduating with more debt.
As we mentioned earlier in this newsletter, it takes far longer to save for a downpayment now than it has in the past. As if that weren’t bad enough, many young people can’t even begin saving up a downpayment because they are stuck paying off student loans.
The financial burden placed on graduates is causing them to make some tough choices:
“Between the rising cost of living and repayment of student loan debt, 42% of graduates are considering leaving the province for somewhere more affordable”.
It’s important to note that things didn’t turn out this way by accident, they are a direct result of our federal budget prioritizing the needs of retirees over those of younger people.
Image of the week
That’s all for this time.
If you have any related content (stories, images, research reports, etc.) that you think would be a good fit for future editions of “Generation Squeeze: Weekend Reading” please send them along.
We’d love to hear what you think about all of this. See you in the comments section.
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There needs to be a cap placed on what new landlords can charge for an apartment/rental unit. Because there is no law addressing this problem. Shady new landlords come in, and bully and harass current tenants to move, and then triple the rent all for the cost of a new coat of paint. This is why rent has skyrocketed, because no government is holding owners/landlords accountable for their greed.
Just the consequences of many in a generation deciding not to have kids is huge in terms of Canada staying a productive nation. Plus we will loose talent to other nations that have more affordable housing. Not to mention the damage done psychologically to young people. Making them claw so hard for so long will tend to make them a less generous and more cynical generation.