Posthaste: Millennials still feeling the effects of the ’Great Recession roadblock’ in their careers
Not only do millennials have to deal with aging baby boomers and their debt, research now shows they also face a major handicap by starting their careers in the throes of the biggest recession since the Depression.
Recessions as a rule hit young people the hardest, but what’s less well known is that the effects of graduating into one last for years after recovery is underway, says Andrew Agopsowicz, senior economist with RBC Economics Research. “Evidence suggests the health of the economy at the start of a person’s working life can accelerate, or delay, a person’s entire career,” said Agopsowicz in his report “The Recession Roadblock.”
Unemployment for Canadian 20-24-year-olds in the Great Recession rose from about 9% in 2008 to hit a high of 15% in 2009 and the millennials who were 19 to 23 at the time are still showing the effects. The report says that today less than 10% of that group now aged 30-34 are in a management position, and 37% are in a skilled occupation. That’s a drop from the older group who graduated before the recession where 12% are in management and 41% in skilled occupations.
Graduates of the Great Recession also lag on wages, said Agopsowicz. Average hourly wages of those who likely entered the workforce between 2009 to 2011 have grown about 60% over the first 10 years of their working lives, compared with 71% growth for those who entered earlier. Researchers are only starting to get a picture of the later group who entered the workforce after the recession, but their wages appear to be stronger.
Agopsowicz said with 1 million students enrolled in Canadian universities and economists predicting a 30% chance of a recession within 12 months, it’s worth taking a look at the experience of the last recession graduates.
Here’s what you need to know this morning:
Foreign Affairs Minister Francois-Philippe Champagne attends the G20 Foreign Ministers’ Meeting in Japan
European Central Bank President Christine Lagarde delivers keynote speech at European Banking Congress in Frankfurt
Ontario Labour Minister Monte McNaughton will make an announcement for Ontario businesses in Toronto
Indigenous, environmental and public interest organizations hold news conference in Edmonton to call on federal government to reject recommended approval for the Teck Frontier oilsands mine in northern Alberta
Statistics Canada releases Canadian Housing Survey
Notable data: Canadian retail sales, University of Michigan consumer sentiment index
Canada’s mortgage stress test has roused heated debate, but now a new survey by the Canada Mortgage and Housing Corporation gives us a glimpse, anyway, of what’s really happening out there. A comparison between the latest 2019 survey and the one done in 2018 (where most would have bought before the stress test was extended to uninsured buyers) offers valuable insights on how home buying has changed over the past few years, says the Haider-Moranis Bulletin. Most of the homebuyers (56%) in the 2018 survey were first-time buyers, but that share fell to 47% in 2019. As the chart below shows, that’s not the only signals that housing has became less affordable. In 2018, 22% of first-time homebuyers reported renting for more than 10 years before buying. In 2019, that share jumped to 31%. One in four buyers in the 2019 survey said they were affected by the stress test and had to make compromises. Most cut back on other expenses (60%), relied more on their savings (59%) or bought a smaller home (52%).