On Sept. 11, Statistics Canada will be releasing new data from the National Household Survey on income and housing. UBC Prof. Paul Kershaw speaks about the issues related to the financial pressures facing young Canadians.
Professor Paul Kershaw
You talk a lot about Generation Squeeze, the generation under the age of 45 who are coping with lower wages and ballooning housing prices. What do you expect to see in the Statistics Canada results?
The big story will be the continuation of trends that create generational inequities.
After adjusting for inflation, housing prices will be around twice as expensive today as they were when Baby Boomers started their families. For those who owned homes decades ago, today’s higher housing prices mean more wealth. But what has been good for retiring parents is generally bad for their kids and grandchildren. High home prices squeeze generations under age 45 with crushing debt, which they must pay with lower wages than a generation ago, in jobs that rarely pay pensions, despite devoting more time to post-secondary than any previous generation.
How do financial pressures related to income and housing affect Canada as a whole?
These pressures invite Canadians to adapt social policy in the face of new realities for younger generations. Presently, government spends around $45,000 a year per retiree in Canada, mostly on medical care and expenditures on retirement income.
This spending is nearly four times larger than all government spending per younger Canadian. Grade school, post-secondary, medical care, spending on families, and insurance for workers add up to around $12,000 per person under age 45.
The high level of spending per retiree is not the problem. It has been successful in reducing the economic pressures facing millions of seniors today compared to the past. Now poverty is lower for seniors than any other age group.
The problem is when we spend $45,000 per retiree, but go on to say there’s nothing left in the cupboard to adapt policy for younger generations who face new challenges. Over the last decade, this has been a dominant theme in provincial and federal budgeting – one which risks pitting the health of grandparents against the well-being of their kids and grandchildren.