By Blair Gibbs and Aaron Wudrick, September 13, 2022
As young people conclude their first post-COVID summer and look ahead to the new term of college or the jobs they can start after graduating, the storm clouds of economic distress are gathering.
Inflation and recession are effectively new phenomena for Canadian adults under 30, and the economy they must navigate looks not unlike the 1970s. However, today’s young adults are less resilient than their grandparents and face the prospect of more economic uncertainty over their lifetime than their parents and especially the Baby Boomers – and they feel it.
In research undertaken for the Macdonald-Laurier Institute, we explored the economic outlook and attitudes of young adults aged under 30 who were born or went to school here in Canada. How do these young people feel about their place in today’s economy? How optimistic or pessimistic do they feel? And what might policy-makers do to improve their economic prospects given the era of inflation we have entered post-COVID?
Directly below you can engage with a selection of the findings as an interactive data set. Scroll further to read the full commentary analysis. Download the focus group findings here, or the full polling data set here.
A lack of optimism
We have known for some time that today’s young people face more debt, more job competition and lower relative incomes than their parents and grandparents at the same age. This is true in countries like America and Britain too, and Canada’s rates of student debt are not the highest. But when we surveyed all young people – including those who did not attend college – there is a worrying lack of optimism about their economic prospects across the board.
Less than 40 percent of young Canadians expect to enjoy a better standard of living than their parents. Only 34 percent are optimistic that their earnings will increase in the next five years. And only 25 percent are optimistic that the Canadian economy will improve in the next five years.
But these attitudes are not simply a reflection of current financial pressures. In fact, today’s inflation and cost of living pressures are falling hardest on those older Canadians who live alone on fixed incomes. Instead, this pessimism seems to be a result of a wider realization: making economic progress is harder for younger people than ever before.
Given the unaffordability of housing, many in the 18-24 age group were living with their parents, and either studying full or part-time, or working in some capacity. This meant they had fewer expenses and were somewhat insulated from cost-of-living pressures. Those aged 25-29, the oldest age group in this research, were more likely to be living independently and to have experienced the rising cost of rent, and of daily essentials like gas and groceries.
However, the real economic despair related to bigger issues like home ownership. Many respondents talked in terms of owning one day, but for some, the opportunity seemed so far off, and so unachievable given current prices, that they had almost discounted it. Many respondents were not actively saving for a deposit, for example. In fact, fewer than a third (31 percent) thought it likely that they would be able to afford a home in the next 10 years. In this project’s focus groups, participants were able to comment on their own experiences on these issues. The comments of some of the participants on housing are particularly salient:
“My dad bought a house when he was 30. In 1995 nice houses weren’t crazy expensive. That’s kind of what I’m jealous of. I’d love to buy a house when I’m 30 but I don’t see that happening any time soon.”
Focus group participant
“I haven’t really thought about home ownership given the city I live in, that doesn’t feel like an achievable thing at this stage unless the market changes.”
Focus group participant
Runaway house prices have been a burden for young families for more than a decade but as the gap between incomes and average home prices expanded rapidly during the COVID era 2020-22, we may be reaching the point where younger Canadians no longer believe that home ownership in our major cities is any longer a realistic goal.
Some of these economic factors fed through into other decisions young people were making about when to settle down and start a family. Most participants anticipated getting married and having children later then their parents, with the cost of housing and the cost of a wedding itself being cited as key reasons. Some female participants also spoke of their desire to be more developed in their careers before going on maternity leave, especially those studying for medical or legal qualifications where they had been in college longer and taken on more tuition debt.
As younger generations have to wait longer to own property, get married later in life, and also have fewer children, this has a long-term consequence in terms of the fiscal picture for Canada, which results in an aging society and fewer workers supporting a larger generation of retirees. This trend is seen elsewhere, and it is already creating something akin to a debt timebomb for future governments in the 2030s. Put simply, there will be a social impact decades from now because of the economic disadvantages faced by today’s under 30s.
The costs loaded onto young people today in terms of high student debt, lower relative wages in early careers, no reduction in the tax burden, and the high cost of childcare are all conspiring to make marriage and home buying in your 20s increasingly rare. For Canadian society as a whole, this might explain the economy’s clear dependency on high immigration rates to sustain a large enough labour force to support a growing population of seniors, especially as migrants typically have more children on average.
The real divide
In the polling for this project, the provincial differences were not stark, and men and women did not differ significantly on their attitudes. The only exception were women ages 25-29 who were notably more pessimistic than all other demographics, for reasons that are not clear. More research is needed into why young women in their late 20s seem less optimistic about the future and whether this is tied to careers, to COVID, or to marriage and families.
What was notable, however, was that in contrast to these same debates in America, the research showed no significant racial dimension to the economic issues we explored. Divisions in Canadian society over how the economy works (or doesn’t) are not racial – they are generational. There does seem to be a real and growing generational divide in Canada that today’s politicians are ignoring, in preference for debate about racial injustices or gender identity that do not seem to factor much into the economic prospects of the under 30s, or even their top concerns politically.
Overall, for the 18-29 age group, cost of living, closely followed by house prices, were having the biggest impact on their lives right now – ahead of the pandemic. And for a generation that is assumed to be motivated by rights-based causes and global issues like climate change, these issues scored much lower. Racism and gender discrimination were only deemed big impacts for a minority of respondents. However, an issue like drug addiction – perhaps seen as a fringe issue not impacting large numbers of people – was in fact cited by one-third of young people as having a notable impact. Thirty-two percent of participants said drug addiction had a large to moderate impact on their lives, suggesting this social problem is more mainstream amongst young people. In addition, almost half cited job security as one of the issues that had the biggest impact on them – a concern that is hard to imagine their parents being worried about.
In our national polling, over 60 percent of participants agreed that older Canadians do not understand the struggles of younger generations. In focus groups we conducted for this project, the disparaging label of “Boomers” was used, unprompted, to describe whom they feel envious of. One focus group participant said the following:
“I’m kind of a boomer hater. They’re the people telling us to just walk in and hand in a resume… but they’re the people that could just walk into a business and they’d have a career for the rest of their life.”
Focus group participant
The pandemic lockdowns only reinforced this impression that the system was stacked against them, with emergency laws that jumped to the defence of older Canadians but did little for young Canadians, despite society relying on younger workers to keep the grocery shelves stocked. Shutdowns were seen as protecting comfortable retirees at the expense of the life experiences of students. Reflecting on the pandemic, another focus group participant remarked:
“The boomers had the easiest life in human history. Some people gave up half their high school experience so the older generation could live a few more years in their fully funded retirement. In school tuition wasn’t lowered, but seniors got an old age security bump.”
Focus group participant
Causes for optimism
The good news is that the pandemic may not have been as detrimental to young adults as some might have feared. They did not feel angry about COVID or how it had been handled, with the exception being those who were on the cusp of college who were sad to have missed high school graduation, proms, and other coming-of-age experiences. It is too soon to know if the lockdowns and the disruption to schooling has had a more negative impact on educational attainment and career outcomes for younger teenagers.
None of the focus group participants faced significant financial hardship because of the pandemic, and some said they had become temporarily better off thanks to furlough payments and programs like the Canada Emergency Response Benefit (CERB). Mixed attitudes were evident in terms of online learning and the move to remote tuition, but it was not seen as having impacted their career prospects negatively. The bad news is that the pandemic made certain structural challenges for young people – especially housing affordability – much worse.
We found that educational achievement was still correlated with income and career success, and viewed as such by the respondents. Those with master’s degrees were significantly better off economically than those who did not graduate high school – more likely to be working full-time, living independently, and with investments and/or high incomes. And more importantly, young Canadians seem to have a conventional meritocratic view of what engenders success in life.
When asked what factors would have the most impact on their income and net worth by the time they were 35, the top answers included: work experience, job performance, and educational qualifications. Notably, these answers were ahead of: the person I choose as a partner, my reputation or profile, or my parents or close family. In this sense, the younger generation do believe that you can succeed in Canada by investing in yourself and performing well in your career, and that becoming well off doesn’t depend on your parents or who you know.
In terms of what seems to determine a more optimistic outlook, respondents who had benefited from family financial support were less pessimistic. Our polling asked whether respondents had ever received financial support for themselves in their careers, either from parents or grandparents, to help support them to pay for tuition or a down payment, and as a gift or an inheritance. Looking at the pessimism-optimism spectrum, those who had received financial support were notably more optimistic about the future.
Just on its own, this raises interesting social and policy questions in terms of how older and more asset-rich generations are incentivized in the tax system to pass down their wealth to younger Canadians when they can most usefully take advantage of it, either to minimize debt starting out in their careers or to make it onto the housing ladder earlier.
After COVID, the economy is facing significant challenges and the long-term pressures on young people aged 18-29 look acute. The job market disruption that technology and automation will deliver over their lifetimes is profound. The benefit of a college education may become less tangible, and job security is already an old-fashioned concept for anyone not working in the public service.
Many of these economic challenges are not new. Every generation has had to adapt to new technology and the decline of traditional industries. But under 30s in 2022 are facing this wave of economic disruption while saddled with more debt than their parents, and while owning fewer assets in an inflationary environment. As they graduate high school or college, this cohort are also emerging into a period of tighter credit, higher interest rates and industrial unrest, which may also make it harder to find their footing. And unlike their parents in the 1970s and 1980s who also had to endure high inflation and high interest rates, the goals of home ownership look unattainable because prices are already so high and disconnected from average earnings.
After two decades of rapidly rising property values and with many older Canadians mortgage free and so less impacted by today’s interest rate rises, seniors have more reason to feel secure and positive about the future. But Canada needs its own young people to feel optimistic, not just its retirees. Policies that disproportionately benefit older Canadians are only going to exacerbate this perceived unfairness. And yet few politicians today even acknowledge that the generational imbalance exists, or that young people feel under pressure economically and are right to feel disenfranchised by the current economy.
Fortunately, meritocracy seems to be a principle that young people do subscribe to in Canada, even if the road to the top of the career hill is steeper than it once was. However, this research paints a picture of a pessimistic generation overall, a generation filled with young people who are aware of their own relative disadvantages – the student debt they carry, the struggle to secure a rewarding job, or the impossible dream of buying their own home – and feel misunderstood and even resentful about their situation when they think of how much easier it was for older Canadians.
The best public policy response to the intergenerational inequality of today’s Canadian economy does not point one way: lower house prices or cheaper childcare would help, but they are not simple to deliver and will not by themselves address major structural trends that have led to falling productivity, lower wage growth, and ballooning personal and public debt.
The overriding conclusion from this study is that the policy environment should take the generational question seriously and not dismiss it as if the complaints of today’s young adults are transitory and they will age out of the resentment when they finally buy their own home, whether that is at age 32 or 42.
The deck is clearly stacked against young Canadians on many metrics, and society will feel the consequences in terms of smaller families and future generations of working Canadians that are less financially secure. Politicians need to start to promote bold policy reforms that befit the scale of the challenge rather than ignoring the problem for another decade and expecting the resentment to dissipate on its own.
Young Canadians want issues affecting them to be addressed by politicians and for their economic disadvantages to be accepted by older Canadians – even if only as a basis to start a more meaningful conversation about where we go next. After all, if the ladder to a middle-class lifestyle of opportunity and assets is not restored for younger people, the generational divide that is fuelling pessimism and a sense of resignation among Canada’s under 30s could turn into a political rebellion that will be felt by voters of all ages.
Blair Gibbs is a policy consultant based in Vancouver, BC, and a former senior advisor to the Prime Minister of the UK (2019-20). Aaron Wudrick is the Domestic Policy Program Director at the Macdonald-Laurier Institute.
This Macdonald-Laurier Institute research project investigated the views of young Canadian adults on contemporary political and economic issues. The initial step in this research was two focus groups with young adults between the ages of 18 and 25.
The two focus group sessions were held on March 30th and March 31st 2022. The first session consisted of six young adults in Ontario, while the second consisted of four young adults in British Columbia. Each session lasted approximately two hours. Focus group data was collected from discussions facilitated by Policy Works. Full focus group findings and more detailed information are available here: https://macdonaldlaurier.ca/wp-content/uploads/2022/09/220407-MLI-Focus-Groups-Summary.pdfhere:
These focus groups were used to inform the development of a national poll.
Polling was done on behalf of the Macdonald-Laurier Institute. MLI used the services of One Persuasion to conduct the polling. The survey was conducted nationally during the month of August 2022 in English and French, and surveyed 1509 Canadians between the ages of 18-29. It is considered accurate +/-2.5 percent, nineteen times of of twenty.
Full polling data is available here: https://
Both the polling and focus groups informed the findings of this report.