The Secret Government Report Claiming Young Canadians Are Richer Than Ever Is Bullshit
It's the rich that are getting richer.
I didn't leave my mom's house until I literally moved to the other side of the country—at age 25.
During the time I lived with her, I also ate all of her food and occasionally asked her to go to the movies with me with so that she would pay for both us.
For years, she put up with my crap because she knew paying rent in Vancouver on a lowly reporter's salary meant not being able to eat (read: drink and party). Amongst my friends, at the least who'd been raised in Vancouver, I was no anomaly—most people lived at home while in school and continued to do so after graduation, saddled with student debt and arts degrees that led to barista gigs.
So I was a little thrown off today when I read reports that young Canadians, according to our federal government, are baller as fuck.
A CBC story published "SECRET" data from the Finance Department that says Canadians aged 28-34 are the richest they've ever been, with an average (not median: see more on that later) net worth of $93,000, about 35 percent more than other generations. Based on wealth surveys conducted by the government from 1977 to 2012, it seems Canadians in this age bracket are faring much better than their counterparts in the US, UK and Australia.
"The 2008 recession did not seem to affect much the wealth holdings and earning potential of today's generation of young middle-income Canadians," the report says, while the CBC notes "the findings raise questions about the Liberal government's focus on helping young Canadians through difficult times."
But before we go cancelling Justin Trudeau's $1.5 billion youth employment strategy, let's consider for a moment that this research might be complete and utter garbage. (Is that why they kept it secret?)
"It's bullshit," said Vancouver freelancer Jessica Barrett, who researches and reports on precarious employment and income disparity amongst young people.
Barrett pointed out the government's numbers are based on average net worths but there's no context given as to the young people included in the survey—we don't know if they came from wealthy families or not, though the conclusions certainly seem to indicate they did.
UBC professor Paul Kershaw, an expert in generational trends, says the story is much more "complicated" than what the government report suggests.
"Canada doesn't have good data to compare student loans now versus the 1970s or 80s. That's a problem, because tuition back then was half what it is today (after inflation). And fewer young adults back in the day incurred any student debt, because only half as many went to postsecondary," he said in a statement.
The CBC's own case study, Torontonian Alyssa Furtado, 31, who founded RateHub.ca, now owns a house in downtown Toronto and has retirement savings, admitted she graduated without student debt thanks to her parents.
"Canadians who are able to get into the housing market, who are able to put savings away, by and large are those that were able to have their education paid for by their parents... and that's certainly not everybody," said Barrett.
The government report notes that student loans are basically a non-issue in terms of impacting the overall net worths young Canadians, but perhaps that's only true if you're not paying it back on your own.
The Canadian Federation of Students estimates the average student debt load upon university graduation is around $27,000. Coupled with a national unemployment rate of around 13 percent—about double the average of the general population, it's pretty hard to see how folks in their late 20s are doing better than ever.
As a result, many young people are forced to take temporary or contract jobs, in which they don't receive benefits or pensions. A 2015 study by TD Bank found that 30 percent of youth employment (aged 15-24) was made up by temp jobs.
"I work for myself and that's risky but I make enough money," said Barrett, 33, who has a mix of freelance contracts and shares the main floor of a Vancouver house with a roommate.
"But if anything were to go off in the balance, if I were to get sick or have a kid, I do not know what I would do. Everything would fall apart."
Toronto-based labour lawyer Andrew Langille said the government findings simply highlight the income disparity between the rich and the poor.
"The entire study appears to be skewed by the incomes of the top 10 percent but especially the incomes of the top 1 percent," he told VICE.
A report by BMO Economics put the median income of millennials (aged 25-34) in Canada at only $34,700 in 2011.
And, to state the obvious (which the government report does not), the party for young Canadians doesn't stop with crushing debt and joblessness/low wages.
Anyone who lives in an urban centre is additionally fucked over by an inflated real estate market.
The average rent for a one-bedroom apartment in Toronto is $1,103, slightly more than Vancouver's $1,079.
And buying a house in those markets is a laughable prospect for many.
"It used to take 5 years for a typical 25-34 year old to save a 20 percent down payment. Now the average home costs over $400,000, and it takes 12 years to save the down payment," Kershaw's statement reads. "Canada's crazy housing market has become a major source of intergenerational inequity between young and old. It's the major driver of wealth for older Canadians and the major driver of debt for younger Canadians."
Anecdotally speaking, Barrett said when she speaks to friends her age, "I'm seeing abject panic everywhere."
"They are firmly middle class on paper until they look around and they're like 'I can't believe I can't afford a townhouse in the suburbs, I can't afford a condo, I can't afford childcare, I can't afford to live any place where I don't have a commute that's an hour to an hour and a half each way.'"
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