Money talks: Young adults have it harder than you might think
Being a young adult in the 21st century is a bit of a terrifying prospect. Whenever I tell someone over the age of 50 this, I always get the same reply.
“We almost lost our house when the markets went crazy in the ‘80s,” or, “My first job after high school was at a box factory and I made two bucks an hour.”
My parents’ generation has a hard time admitting that despite the luxuries their children have been afforded — the Internet, cell phones, the possibility stem cells will cure every disease out there — many of us are having a rougher go at the game of life than they did.
A recent article published in the Globe and Mail confirms what many of us in our 20s and 30s have been feeling for a few years now.
In the May 7 piece, “2012 vs. 1984: Young adults really do have it harder today” the Globe’s personal finance columnist, Rob Carrick shows numbers don’t lie.
“If houses kept up with inflation – and that would be a pretty good result all on its own – the average house would now cost $154,587. In April, the actual average was $369,677,” he writes.
My parents bought their first new home in Airdrie in 1982 for around $60,000. Adjusted with inflation, a similar-sized new home in our city should cost $121,700 today, according to the Bank of Canada’s online inflation calculator. If someone can find me a brand-new house with a spacious yard in Airdrie for that price, please email me. The reason I won’t need to check my inbox for those offers is according to Carrick, in 1984, the average house in Canada would cost a family 1.6 times its annual income. These days, the average Canadian home is worth more than six times what the average annual household income is.
Post-secondary tuition in Canada has gotten just as bad. In 1984, “tuition cost more or less $1,000,” Carrick writes.
I usually worked part- or even full-time jobs during most of the four years I attended university. At the end of it, I still had a mountain of student loan debt to handle.
The reason for this is, admittedly, was I was really bad with money back then, but also because the average yearly tuition fees in Canada are $5,366.
Nearly everything young people have to buy these days — again, when adjusted with inflation — is much more expensive than people currently in their 60s, 50s, or even 40s paid for it when they were our age.
I’m not sure what the solution is to this generational financial inequality, and if it gets worse, I can’t imagine the problems my children’s generation will face.
But I will say next time you want to lecture young adults on how bad the real world was when you were their age to remember these numbers, and the thesis of Carrick’s column:
“(There’s) a view that today’s young adults should just grow up.
My sense is that’s what they’re trying to do. But it’s tougher out there than some of you might know.”