May 5, 2017 "Gen Y Work Woes: Going up a down escalator": Today I found this article by Rob Carrick in the Globe and Mail:
Starting a career as a young adult today is precarious work.
Starting a career as a young adult today is precarious work.
Almost one-quarter of the generation of young adults born between 1981 and 2000 are working temporary or contract jobs, nearly double the rate for the entire job market. Almost one-third are not working in their field of education, 21 per cent are working more than one job, and close to half are looking for a new job.
These numbers come from a Globe and Mail online survey of millennials that attracted 2,636 responses from people who weren’t in school and either working or unemployed. Taken together, the results show a significant number of millennials are not prospering in today’s economy.
“My metaphor is an escalator going down faster than young people can run up, no matter what adaptations they make,” said Paul Kershaw, a University of British Columbia professor and generational equity expert who founded the group Generation Squeeze.
“They go to school longer, they work longer hours, they delay starting families. But those adaptations aren’t enough to sprint up faster than the escalator is going down.”
Job quality is more the issue for millennials than quantity. The unemployment rate for young people is a little less than double the national rate of 6.6 per cent, which is in line with previous generations. People entering the work force after graduation have always battled to find their way.
But the survey results suggest there are additional challenges today that can’t be dismissed as a brief stage young people must pass through on the way to career success. Of the people who answered our questions, 45.6 per cent turn 30 this year or are already in their 30s.
“What boomers might have experienced when they were 21, people are now experiencing when they’re 31,” said Vasiliki Bednar, who headed the federal government’s Expert Panel on Youth Employment. “I think a lot of people would agree that the 20s are a messy time. When we see people in their 30s who are experiencing delayed adulthood, that’s a problem.”
A late start in career-building can have effects for decades to come. Parents have children later or not at all, major purchases like houses get pushed off and saving for retirement is postponed.
For governments, this raises questions about whether today’s young people will be productive enough as taxpayers to bear the costs of our aging population.
Here are the highlights of The Globe’s millennial employment survey with analysis from a trio of experts – Ms. Bednar, Prof. Kershaw and Benjamin Tal, deputy chief economist at CIBC World Markets.
What stands out here is the percentage of young adults who are working term or contract jobs, also known as precarious work. “I think it’s very high,” Mr. Tal said. “We don’t have one-quarter of the [total] labour force in contract jobs.” In fact, Mr. Tal’s data show that 13 per cent of the broader population works temporary or contract jobs.
Part of the explanation is our aging population, he said. “There’s a little bit of a bottleneck with baby boomers still in the labour market, and the [millennial] generation is the one that is really suffering from this.”
Another factor is the current environment in the corporate world, where cost-cutting priorities stand in the way of full-time job creation and technology is being used in ways that may replace human workers. “It’s not that young workers want to be in contract jobs,” Mr. Tal said. “That’s what’s available at this point.”
Both Mr. Tal and Prof. Kershaw were struck by the low percentage of people in our survey who were self-employed – in the broader work force about 10 per cent of people are self-employed. Ms. Bednar said millennial entrepreneurs tend to treat their projects as what’s known as a “side hustle,” or a job on the side.
“You don’t see a lot of smiling faces here, do you?” Mr. Tal said. He sees these numbers as a reflection of the fact that young adults don’t have a lot of bargaining power in the work force and thus are forced to take jobs they don’t really want.
Ms. Bednar described the dissatisfaction numbers as disappointing. “This is sad to see from people are who are starting out in their career.”
Prof. Kershaw links these numbers to the lack of earnings growth among people aged 25 to 34 over the past 40 years. He said that in the mid-1970s, median earnings were about $4,020 higher for permanent workers than they have been in recent years after inflation is accounted for. He estimates that median wages for precarious work are down even more over that same period.
“Young people were sold this idea that if they went to school, they would get security,” Prof. Kershaw said. “Well, that didn’t actually play out very well. Not only did they not get security, they were also asked to work more for less.”
Prof. Kershaw said he was heartened by these numbers to some extent. “This is a random sample and two-thirds are actually finding a job in the field they trained for. That strikes me as reasonably positive.”
For him, the bigger question is whether millennials are earning enough money in their jobs to live their lives. He doubts, for example, that many are earning enough to be able to buy a home.
Mr. Tal sees these numbers as evidence of some young people not studying the right things while in university or college. “If you’re not employed in your field, it means you don’t have the skillset that is needed.”
Ms. Bednar suggests that universities and colleges bear some responsibility as well for people not working in their field. “We push education as a ticket to the middle class, but we haven’t adapted our institutions.”
“Look how high that is,” Prof. Kershaw said of the nearly half of poll participants who were looking for new work. “This strikes me as signalling that earnings are not meeting expectations for earning a living, or for the time and money they put into their education.”
“Look how high that is,” Prof. Kershaw said of the nearly half of poll participants who were looking for new work. “This strikes me as signalling that earnings are not meeting expectations for earning a living, or for the time and money they put into their education.”
Mr. Tal was likewise struck by the high percentage of people who were evidently not happy with their work. “Clearly, they’re young, they’re restless – you know the story. But almost half are looking for a new job. That’s significant.”
For Ms. Bednar, the high number of people looking for a new job suggests young people are tired of the lack of security that comes from precarious work.
Mr. Tal’s data show that in the broader population, 6 per cent of people work two jobs. So the percentage shown here for millennials is exceptionally high. Prof. Kershaw believes this number highlights how people are trying to make multiple part-time or temporary jobs equal a full-time living.
Ms. Bednar said the high number of people working two jobs highlights the fact that it has never been easier to have a side hustle in addition to a regular job. But she wonders whether people are working multiple jobs by choice or necessity.
“Is this a matter of someone saying, I cannot make ends meet? I cannot pay my rent unless I’m babysitting or cleaning someone’s home or bartending or working as a barista?”
Prof. Kershaw sees these numbers as supporting his view that millennials are getting a worse deal in the work force than previous generations, while Mr. Tal said these numbers reflect the high incidence of contract work offering no benefits.
Ms. Bednar said the lack of benefits disproportionately affects younger women. “For women, birth control can be quite expensive, and the best kinds of birth control are the most expensive.”
An indication of the dollar value of company health benefits to even healthy young millennials can be found in data from the benefits consulting firm Morneau Shepell on expected dental claims by age group. In British Columbia, these dental claim costs averaged $1,094 in 2013 for people between the ages of 25 and 29 and $1,067 for those between 30 and 34.
As with the broader population, a minority of participants in the Globe survey had a company pension plan. This puts the onus on them to save enough to retire comfortably.
Conclusion
Ms. Bednar’s panel on youth employment reported to Patty Hajdu, federal Minister of Employment, Workforce Development and Labour, on March 31 (the report has not yet been made public). “People were very frequently dismissive of the panel’s work,” Ms. Bednar said. “They said, you have to prove what’s different now.”
Her answer comes back to the difficulties people are having in the work force in their 30s, not just their 20s. She worries about what this trend means for the economy and government finances if it continues for the long term. Will millennials turn into a generation that can’t pay its way?
Mr. Bednar says there’s a case to be made that precarious work has some value when you’re just starting out in the work force. You can find out what you’re good at, and what you value in an employer.
“But the alarm bells go off when precarious work turns into a lifetime career of cobbling it together.”
My opinion: This is a good article. However, we don't know everything about people's situations like are they working 2 or more jobs because of necessity or choice?
Do they want to try out contract or temp work because they want to try out the job or career, or because it's the only job they could get?
May 30, 2017 "Older Canadians not the problem": Today I found this article by Wanda Morris in the Edmonton Journal:
According to newly released Statistics Canada census data, the number of Canadians aged 65 and over is now greater than the number younger than 15.
For many, this is cause for celebration. Canadians are not only living past 65 in greater numbers, they are living to greater ages; a record number of centenarians was also reported.
Others see this demographic shift as a cause for concern.
No matter what they do, it seems seniors are an open target. If they continue to work past 65, why don’t they retire and make way for younger workers?
If they retire, why do they expect younger Canadians to support them?
If they are hale and hearty, how long can younger Canadians be expected to support them?
If they are infirm, why are they taking up so many health-care dollars?
Paul Kershaw of Generation Squeeze painted a woeful picture of seniors as the anchor holding back the inter-generational fairness ship. Let’s look at some facts.
Kershaw noted that federal spending on seniors is projected to rise from $51.1 billion in 2017 to $63.7 billion by 2022; he calculated this as equivalent to an annual increase of 5.7 per cent per year. While my own calculations come out at a less alarmist 4.5 per cent, the point remains: it is unlikely that growth in the gross domestic product (GDP) will equal the growth in federal spending on seniors.
But it’s important to realize that Kershaw is comparing apples to gorillas. As an analogy, imagine we are talking not about the finances of Canada as a whole but rather your household budget.
The growth in spending on seniors would be equivalent to the growth in one budget category, say transportation expense; while the growth in GDP is equivalent to the increase in your total household spending.
Granted, spending on seniors is not inconsequential. Using Kershaw’s numbers, it is $51.1 billion of $330 billion, or 15.5 per cent of the total, and by 2022 it will grow to $63.7 billion of $336.5 billion, or 18.9 per cent of the total. But spending on seniors is not an inescapable tidal wave destined to swamp our fiscal spending raft.
If we look not at total spending, but at how seniors’ income breaks down, Statistics Canada provides some telling information. According to the national agency, 19 per cent of seniors’ income comes from Old Age Security (OAS) and the Guaranteed Income Supplement (GIS).
An additional 22 per cent of income comes from Canada Pension Plan payments.
While CPP was originally created as a benefit, it is now self-funding from contributions made by employees and employers, so this will not drain resources from elsewhere.
Other sources of seniors’ income include 30 per cent from private pension plans and 10 per cent from investment income.
In total, this accounts for 81 per cent of seniors’ income (the balance being income from employment, self-employment and unspecified sources).
CARP has long been an advocate for increasing CPP and other pensions to reduce reliance on taxpayer-funded programs like OAS and GIS. But even at current rates, 19 per cent hardly makes seniors completely dependent on the state.
However, spending is only half the story. Seniors continue to pay income tax on their earnings, including any government transfers they receive. They draw down and spend accumulated savings, stimulating the economy and paying goods and services taxes in the process. And older Canadians pay a disproportionate share of municipal taxes, with 40 per cent of homes in Canada owned by those who are age 50 to 70.
Concerns about inter-generational fairness point to a real problem.
But it’s not the amount governments spend on different cohorts; it’s the allegation that seniors are somehow “screwing” younger generations.
This rhetoric is not only wrong, it has the potential to do harm. Like conversations happening (primarily) south of our border about immigrants, disparaging comments about seniors will only increase the ageism that many Canadians already experience.
There are many things we can, and should, do that will not only reduce federal spending on seniors, but increase the wellbeing of Canadians as we age.
For example we can provide appropriate types of care close to home to reduce health-care spending. We can provide incentives for seniors to continue working, to increase tax revenue.
We can improve retirement security and investor protections so that fewer seniors need rely on government support.
For starters, we need to stop seeing seniors as a drain on the system and instead start seeing them as our future selves — people who have spent their lives facing challenges and doing their best to look after their families, their communities and their futures.
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