Millennial generation earning less than their parents
That’s the finding of a new study that looked at incomes in 1981 and compared them to incomes in 2006.
Markus Moos, a University of Waterloo assistant professor, says 25 to 34-year-olds of the current generation, often called Generation Y or the Millenials, are staying in school longer, which can delay the age at which they start earning.
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But even taking that difference into account, they’re earning less.
“In my study, I actually adjusted for those differences in educational attainment,” Moos said in an interview with CBC’s Lang & O’Leary Exchange.
“At this age, they’re making less than somebody with the same qualifications as 30 years ago.”
In Vancouver, the 25-to-34-year old of 1981 made $38,335, compared to $34,633 in 2006. In Montreal, that cohort made $31,844 in 1981, compared to $30,555 in 2006.
Many are working in low-paying jobs, in retail or serving coffee, but they still might not make as much as the barista or sales clerk of 1981.
“The study is actually able to show that somebody working in a job like that is earning less than someone who worked at the same kind of job 20 or 30 years ago,” Moos said.
Moos said he didn’t look at the impact of the baby boomers sitting in jobs until well past 65, but agreed that may be part of the dearth of opportunities for Millennials.
He said the lower-income trend will have long-term implications for the economy.
“It’s going to be more difficult for them to afford things like housing for instance. So you might see more young adults living with their parents longer; you might see more of them taking on more debt,” Moos said.
“That’s the other thing – not only do they have no spending power, but they have the same desire to purchase things, so they take on more debt.”
The study doesn't take into account the economic setbacks of the last five years. Moos based his study on Statistics Canada records of inflation-adjusted earnings for young adults in Montreal and Vancouver in 1981 and 2006.