Young people entering workforce still earning less than parents did: census

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Young people entering the job market today may be better educated, but they're earning less money than their parents did a generation ago, according to new census data released Thursday by Statistics Canada.
In fact, it's a trend that began a quarter century ago and doesn't appear to be slowing down - especially for young men entering the workforce.
Across all age groups, median salaries for full-time workers have changed little in 25 years. Workers today make, on average, a mere $53 more than they did in 1980, when adjusted for inflation, according to the census.
That stagnation mainly afflicted the middle class. The top earners in Canada saw their wages increase 16.4 per cent since 1980, while the bottom rung saw a 20-per-cent decrease.
For the 25- to 29-year-old group, it's also a story of decreasing fortunes.
In 1980, median earnings for full-time male workers in that age group - the time when people are generally starting their careers - were the equivalent of $43,767 in 2005 wages. By the year 2000, they dipped to $38,110 and in 2005 they stood at $37,680.
While women have traditionally earned less than men, the year-over-year drop has proven far less dramatic.
In 1980, young women made $32,813 in inflation-adjusted dollars. Their median salaries dropped a mere $234 by 2000 and in 2005 they were $32,104.
"When people reach the age of 30 or 35, many of them have accumulated less money than their counterparts did in the mid 1970s," Statistics Canada analyst Rene Morissette said.
He attributes the trend to the fact young people are staying in school longer, young men seem less likely to find full-time work once out of school and that those who do tend to be paid lower wages.
The trend towards reduced wages for young males is one that emerged in the early 1980s in many economically developed countries, Morissette said, noting economists speculated new technologies were pushing out young workers.
Others believed the recession during that time may have prompted employers to try to cut labour costs by reducing the wages of fresh hires in order to avoid seriously harming morale and productivity among senior workers.
"In 2008, it's fair to say we still don't have a good understanding of why wages of young men fell back then," he said, adding there are some more plausible explanations.
The decline of the manufacturing sector in Ontario and Quebec - exacerbated in recent years by the loss of many automotive jobs and outsourcing to countries with cheap labour costs - has resulted in a 20-per-cent reduction in the number of blue collar union jobs, as well as lower wages for those who remain, Morissette said.
"We know unionized jobs pay usually 10- to 15-per-cent higher wages than non-unionized jobs and that has certainly contributed to reducing the wages of young men during that period," he said.
According to the latest census data, the salaries of blue-collar labourers in processing, manufacturing and utilities, for example, fell four per cent between 2000 and 2005, while machine operators and fabric, fur and leather product manufacturers dropped more than seven per cent.
Even though unemployment is low in Canada, there's been a shift towards a service-based economy - sometimes referred to as the Wal-Martization of the workforce. Often paired with lower salaries, Morissette suggested it's responsible for about 15 per cent of the decline in young people's wages.
Still, resource-driven areas like Alberta have been debunking the trend in recent years as those in the oil fields pull in six-figure incomes, University of Western Ontario sociology professor Wolfgang Lehmann cautioned.
In fact, the latest census data shows median salaries for full-time managers in the oil and gas sectors soared more than 33 per cent to more than $97,000 between 2000 and 2005 - the fastest increase of all occupations.
Meanwhile, supervisors in the mining, oil and gas sectors saw earnings rise 17.5 per cent, while mine service workers and those in oil and gas drilling saw their salaries rise by nearly 16 per cent.
Lehmann suggested skilled trades people including plumbers, electricians, welders and carpenters, are also in high demand right across the country and can stand to make very comfortable incomes.
These areas were historically filled by skilled European immigrants, Lehmann said, noting both today's immigrant and Canadian born populations have gravitated more towards academic fields rather than skilled trades.
Armed with a sociology degree from Carleton University, Emily Fudakowski found herself unable to break out of the bar business and headed to Korea to teach English for a year.
Since returning to Ottawa four months ago, the 30-year-old has been searching for meaningful, higher-paying employment.
Broke and living once again with her parents, Fudakowski laments her situation is far different from that experienced by her mother and father.
By the time her parents were her age, they owned a house in Manotick, Ont., and Fudakowski - the last of three daughters - had just been born. Her mother was working full time as a nurse, while her father was an air traffic controller.
"I don't know how they did it," she said. "Different time. Different skill sets."
Whether young people can expect to trail their parents throughout their careers isn't clear, said Morissette.
"Maybe they've accumulated less money and have lower wealth holdings, but given that they have a higher education, maybe their earnings will grow faster than those of a typical youth in the 1970s," he suggested.
"Maybe when they reach the age of 40 or 45, maybe they will have caught up to the income levels of their predecessors to a large extent, but that remains to be seen."

Full coverage of the census release will be in The Guardian Friday.


Organizations: Statistics Canada, University of Western Ontario, Carleton University

Geographic location: Canada, Ontario, Quebec Alberta Korea Ottawa Manotick

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Recent comments

  • RG
    June 21, 2010 - 20:35

    This doesn't surprise me. Businesses just aren't paying decent wages for entry-level positions.
    You get paid the same no matter if you have a 4 year university degree, or a high school diploma.

    I finished a 2 year college course in computer programming and all related jobs that were available were for about 10$/hr.
    Anything more required at least 2 years experience.(Even though they were advertised as entry-level)

    Maybe if they paid more money to the supposed better jobs, the average would be higher, but as long as people take those jobs at 10$/hr, they're not going to raise the salary.

  • Harpersupporter
    June 21, 2010 - 20:34

    Take a look at what Harper has done for families... The new tax credit $2000 per child and The Universal Child Care Benefit. $100 er month per child under 6. That is a lot more than I have seen from the previous government. Harper has actually had a direct impact on my family. Not to mention the reduction in the GST. It all adds up. Way to go Harper

  • had to laugh
    June 21, 2010 - 20:27

    I had to laugh at the first sentence in this story *Young people entering the job market today may be better educated, but theyre earning less money than their parents did a generation ago, according to new census data released Thursday by Statistics Canada.*
    If they're better educated, how come they can't count change back from a dollar? If a machine doesn't tell them how much, they're lost!

  • Also
    June 21, 2010 - 20:26

    Lower incomes and the highest taxes in Canada.
    Where's the biggest sales tax hit? PEI tops the list at an effective rate of 15.5%, with Ontario running a close second at 13%.

    Article located at:
    http://finance.sympatico.msn.ca/retirement/gordonpowers/article.aspx?cp-documentid=7055385

  • Mary
    June 21, 2010 - 20:09

    Harpersupporter......I am sure Harper has been good for you and your family. I mean, he pays you to make these comments so way to go. But your grandchildren will pay for thegreed of Harper and yourself so enjoy it while you can.

  • John
    June 21, 2010 - 20:00

    If the rich, who live off the work of others, the ultimate welfare recipients, were to have their way, our kids would all be chimney sweeps like they were in Victorian England. Is that the future we want for our kids......BACK to the future? I know Harper works for the rich, why not, they paid for the election and the politician with the most money always wins, but is it democratic to work for only a small group of rich people at the expense of everyone else?

  • c.a.
    June 21, 2010 - 19:54

    Part of the problem as I see it is, when most, and I say most not all, young people leave their parents home they feel that they are intitled to everything that their parents have accumulated over a time span of 30 or 40 years, ie. new home, fully furnished, 2 cars, nice clothes, vacation off Island, etc. I would be interested in where they generated these statistics, where they based on people with degrees? or trades? I do not know of a trades person who is suffering. Mr. Frank White, you make me laugh, you expect people to believe that this generation works 4X harder than the previous generation, give me a break, that is so SILLY that I can't even bother to comment, stopped reading anything you had to say after that comment. Unfortunately, in this day and age, and you go the University route one degree doesn't do it, you need at least 2.

  • frank
    June 21, 2010 - 19:36

    the rich are getting richer, while the poor continue to get poorer. it's hard to stay motivated when you know the best you can do still won't be enough to get you over the poverty line in today's world.

    it's worse, when us younger generations, have to hear about how we're not as 'stable' as our parents, or grandparents were at our age. in our 30's, and still don't own a house, a new car, have kids, etc. why? because we can work 4x as hard as those previous generations and not be able to afford a 1/4 of what they could.

    pretty discouraging.

    not only that, but the seperation of the rich and the poor is much more evident here, on PEI, then elsewhere in the nation. and yet we wonder why there is an increasing crime rate? perhaps it reflects the increase in the amount of the population who sees it as the only alternative to survive (if you already have a criminal record, and you have kids mouth's to feed, you CANNOT get a job here that'll pay you enough to look after it, and yet not paying child support is a crime in more than just a legal sense, so people turn to other less-legal venues for money).

    the older generations on PEI who are complaing about what the island is now (urban decay, poverty, crime) should realize that it is 100% a product of their existance.

  • Andrew
    June 21, 2010 - 19:35

    .
    @Harpersupporter from PE
    You do know that after Harper announced the $100 per month per kid, the day care centres on PEI announced they were raising prices by $100 per month per kid?

    http://www.cbc.ca/canada/prince-edward-island/story/2006/07/06/daycare-fees.html