OTTAWA – When Blaine Higgs graduated with an engineering degree from the University of New Brunswick in the late 1970s, it didn’t take him long to land a job with the company that would be his employer for the next 32 years.
The job with Irving Oil, one of the pillars in the empire of the province’s powerful Irving family, gave him the stability to settle down with his high school sweetheart in the Saint John area, only a few hours’ drive from Forest City, the village by the Maine border where he grew up.
As Higgs climbed the corporate ladder, he and his wife Marcia bought a house and raised four daughters. Last year, he retired with a company pension that should keep them secure for the rest of their lives.
So it is with some concern that he watches his eldest daughter, Lindsey, struggle to establish herself in the Canadian job market, despite being fluently bilingual, having a wealth of international experience and boasting a bachelor’s degree in political studies from Queen’s University and a master’s degree from Carleton University’s Norman Paterson School of International Affairs.
After moving to Toronto last year from Tanzania, where she was doing development work for an NGO, it took her about a year to finally find a contract position with an organization that helps children in developing countries.
"When I came back, I thought I’d try living in Toronto for awhile, and didn’t really understand how difficult it would be to find something," said Lindsey, 27. "The year was very tough – hard on my self-esteem, hard on my sense of where I was going, career-wise. Now, I’m happy with the work I’m doing, but again, it’s contract work."
Her experience isn’t uncommon among her generation. As the economy recovers from the first recession in nearly two decades, many young Canadians are finding it more difficult to attain the same comfortable standard of living – complete with stable job, nice house, and reliable pension – that their parents enjoyed.
With the economy expected to grow more slowly than it did in the boom years before the financial crisis, many are having to downgrade their expectations.
If there’s a silver lining, it’s that the recession didn’t turn out as bad as some expected in the fall of 2008, when the global financial crisis erupted. Compared with the recessions of the early 1980s and early 1990s, employment fell faster in the early months of the latest downturn but stabilized earlier, according to Statistics Canada.
At the end of July, employment had climbed back to just 90,200 jobs short of its pre-recession peak. Moreover, the damage here hasn’t been nearly as severe as in the United States, where nearly seven million jobs have been lost since late 2007 and the unemployment rate stands at 9.5 per cent, compared with eight per cent in Canada.
The ongoing fragility of the American housing market, and renewed fears of a "double-dip" recession south of the border, has prompted several publications, including the New York Times, to ponder whether the "American dream" is slipping out of reach. Is the Canadian version of that dream fading too?
Even though the recovery is underway, times are still tough for many Canadians. Certain groups were hit especially hard during the recession, including workers in the manufacturing and construction sectors, low-income individuals, families with young children, recent immigrants and young people. As of July, youth employment in Canada stood at 14.1 per cent.
To make matters worse, the average Canadian student finishes their undergraduate degree nearly $27,000 in debt, more than double the average 20 years ago. Under such conditions, some young jobseekers are being forced to put off goals, such as buying a house, getting married and having kids.
The recession marked the end of what some economists call the Great Moderation, one of the longest, most prosperous booms in modern history. Between the early ’90s and the global financial crisis in 2008, Canada and other developed countries enjoyed strong economic growth and low unemployment rates.
Tame inflation allowed central bankers to keep interest rates low, setting the stage for even relatively low-income earners to become homeowners and take advantage of the seemingly inexorable rise of housing prices.
The entire edifice rested on a global trade system in which export powerhouses, such as China, and oil-rich nations, such as Saudi Arabia, reinvested their massive trade surpluses in the United States, keeping the American dollar strong and enabling U.S. consumers to continue their credit-fuelled spending binge.
But now that system appears to be unravelling, and growth in the U.S. and other advanced economies is expected to be moderate in the next few years.
Although Canada finds itself in a better position than many rich countries, few forecasters expect the economy to return anytime soon to the heady growth rates of the early 2000s. Powerful demographic forces are also coming into play that will constrain Canada’s economic potential.
In the mid-1970s, people over the age of 55 accounted for less than a quarter of the country’s population; within the next few years, they will make up more than one-third.
As baby boomers retire, growth of the workforce is projected to slow. Unless employees magically become more productive, potential GDP growth – the most the economy can grow when firing on all cylinders – will decline.
"In Canada, we’ve known this demographic challenge is coming. We know that it’s going to slow labour input, we’ve known that the potential growth rate will slow, but it seems like we don’t want to really deal with it," said Kevin Page, who as Canada’s parliamentary budget officer has been sounding the alarm about the long-term pressures that the greying population will put on the country’s finances.
Canadian consumers could be in store for a serious reality check. After dipping during the recession, Canadian housing prices bounced back strongly and only now have begun to cool. It’s one big reason why, compared with their American counterparts, Canadian consumers are brimming with confidence.
Unfortunately, that confidence isn’t justified, said Benjamin Tal, senior economist at CIBC World Markets. By several measures, household debt levels have reached troubling levels. With the housing market now cooling, and no job boom in sight, Tal expects Canadian consumers to eventually become more "subdued."
"In the last 10 years, we’ve seen a huge increase in consumer confidence, without an increase in capability," said Tal. "A wake-up call is overdue."
That wake-up call could be especially jarring for 20-somethings launching their careers.
As a young man, Blaine Higgs had relatively modest career goals: get a degree that would improve his chances of getting a job, hopefully not too far from his hometown.
"I didn’t go travelling around the world. That seems to be the program today," said Higgs, who is now running to represent the riding of Quispamsis for the Progressive Conservatives in the New Brunswick provincial election.
His daughter, Lindsey, has already travelled extensively to do development work, with stints in Samoa, Japan and England, in addition to Tanzania. Growing up, she wanted to be a lawyer, a career path that might have spared her parents some hand wringing.
But after working in Paris for a United Nations development agency, she decided to defer an offer of admission to study law at McGill University and instead pursue her interest in development. These days she’s more interested in job satisfaction – which to her means having a job that offers a high degree of creativity, autonomy and responsibility – than job security.
"My father would look at some of the positions I’ve taken and say, ‘Well, OK, where’s the opportunity to move up?’" she said. "That’s not important to me. I want to enjoy what I’m doing right now."
Members of the Millennial generation, born in 1980 or later, certainly have ambitious career expectations. According to a study published earlier this year, that generation expects salaries to start at just under $43,000 and climb to just under $70,000 within five years of graduation.
The actual salary averages of people at those two stages of their careers are just under $33,000 and slightly less than $45,000, notes one of the study’s co-authors, Sean Lyons.
In addition to good pay and rapid career advancement, Millennials expect to find an employer whose "values" match their own and that provides a "nurturing" work environment where they can make friends and have fun.
Lyons says many baby boomers, born between the end of the Second World War and the mid-1960s, tend to find such expectations unrealistic. But he notes that Millennials have been encouraged, often by their own parents, to aim high.
"They don’t see these things as mutually exclusive," said Lyons, an associate professor at the University of Guelph. "They’ve been told, time and again, that baby boomers are going to retire and there’s going to be so many jobs that people are going to be bidding for you."
Page says Canada’s changing demographics will put an increasing strain on federal finances, as slowing growth curbs tax revenues and spending rises in areas such as health care and elderly benefits. He foresees a major political battle in 2014, when the federal government’s deal with the provinces on health-care transfers expires.
And he sees a rise in "intergenerational" tension across the country, unless politicians tackle the problem soon.
"We have to make changes. We do not have a fiscal structure in this country that’s sustainable."
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