Tapped Out

The Broke Generation

Brittany Verge

Kids these days are worse off than their parents were at their age—so badly so, that many cannot afford to have children of their own.


“My worry is that I’m going to be, you know, with college-age kids some day and still paying my loan.”

Brittany Verge

WHATEVER BECAME OF MY FUTURE. A lot of young people are asking themselves that these days as the struggle to get a start in life gets more and more difficult. Just how difficult was captured in a recent Globe & Mail article. The older generation took it for granted that they would be better off than their parents—wasn’t that the way things were supposed to work? Not any longer.

But the article was barely half-written: we aren’t told why this has happened, or, better, what should be done about it. The plight of young people today hoping to raise a family is simply presented as an inescapable fact of life.

It’s a grim hill to climb, and they’re starting well down the slope.

Generation squeeze

“The typical 25 to 34-year-old earns around $4,500 less [annually] for full-time work once you adjust for inflation compared to 1976,” says Professor Paul Kershaw, the founder of Generation Squeeze. “It’s just a plummeting standard of living.”

The number of young people attending post-secondary institutions has risen to more than 75%, up from 57.3% in 1990. But for many, this is no ticket to a better life. Those who attend university emerge from their studies under a staggering load of debt, averaging $27,000. Some won’t pay that off until their thirties. Brittany Verge is one of those people. She was profiled in a CBC story a few years ago.

After three years of post-secondary schooling in Nova Scotia, Verge graduated in 2008 with about $25,000 of debt. Five years later she had only managed to pay back about $2,000. She struggled to find permanent, full-time work, like many other young people. Last we heard, she was still struggling.

(The penalties for non-payment of student debt are dire: in Ontario, for example, you will be hounded by collection agencies and reported to a credit bureau, affecting your ability to get a credit card, car loan or mortgage. Meanwhile, interest on the loan continues to pile up.)

Wasted youth

It’s a discouraging job market for these graduates. Youth unemployment is high, with Atlantic Canada and Ontario being the worst places to find jobs. One in three people between the ages of 25-29 are working in low-skill occupations. More than a third of employers are hiring graduates for jobs that used to require only high school. The skills, knowledge, talents and energy of young people are being wasted.

To make things even worse, at the same time as real purchasing power is eroding, prices for necessities are skyrocketing. Take housing, for example: buying a house is now well out of reach for many in the young generation. In 1976, it took five years to save a 20% down-payment—now it’s thirteen years. The average cost of a house today is half a million dollars. So most young families will turn to the rental market.

But rent is not cheap, even for a one-bedroom apartment. Want a family? Prepare to shell out a significant amount of that low income you’re likely earning.  

Food and living expenses are also significant. The average annual food bill for a family was $8,629 in 2015. That means the food bill for two adults would be roughly $500 a month. But there are, of course, many other claims on your income: clothing, transportation, household and personal expenses. When you take out the optional ones like alcohol and tobacco, and recreational items, you still have an average of $2,000 a month to pay out.

Not enough of us to pay the keep

Young people in Canada are just trying to get by. For many, a house is beyond their wildest dreams; and starting a family is unaffordable. But here is where the Globe and Mail article leaves us hanging. Is the real concern here the often desperate situation of young people and families in Canada today—or the declining birth rate? The fertility rate is presently 1.6 children per woman: and, says the author, “This could jeopardize the country’s social safety net in the future, as there will be fewer people paying taxes to pay for it.”

The Globe’s real worry seems to be that there won’t be enough people in the next generation to work at fast food and labourer jobs. They say nothing about the fact that the Canadian per capita GDP has been rising steadily, not falling. But income inequality has been rising at the same time, placing Canada a poor 12th out of 17 peer countries. Two Canadians presently possess more personal wealth than the poorest 30% of the country (eleven million Canadians).

That is where the problem begins and ends. Young people without the means to raise families is just a symptom of an economic system that benefits fewer and fewer. Yet even calls for free tuition or a higher minimum wage are denounced from on high as “unaffordable”—as Canada’s total wealth continues to grow.

Want more Canadian children being brought into the world? Change the system so that young people can afford to live, and have a family. But we won’t likely get that advice from the Globe and Mail.


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