Government Of Canada Proves Millennials Make Way More Money Than Their Parents Did But Are Absolutely Screwed Over With Debt
Data released last week by Statistics Canada shows that, perhaps counterintuitively, Canadian Millennials are making more money that their parents did at this point in their lives.
In 2016 dollars, adjusted for inflation, the median after-tax income in a Millennial household is about $66,000, compared to only $51,000 for Gen-Xers of similar age.
In the context of the sudy, "Millennials represent those between 25 and 34 years old in 2016" and "young Gen-Xers indicate those between 25 and 34 yeard old in 1999."
The study also found that Millennials had higher assets and net worth than young Gen-Xers. Homeownership, living in the pricey cities of Vancouver and Toronto, and "having a higher education were three factors associated" with Millennials' "higher net worth."
TL;DR Millennials have a higher net worth than young Gen-Xers did but must also contend with higher levels of debt and income inequality.
Despite higher incomes and net worth, Millennials are also much more indebted than the preceding generation. While Millennials' "debt-to-after-tax income ratio" comes in at a whopping 216%, the value of young Gen-Xers' debt was 125% of their income.
Higher mortgages may be in part to blame. "Though Millennials are entering the housing market at similar rates as previous young generations, they are taking on larger mortgages."
Statistics Canada study on millennials relative to Gen-Xers/baby boomers when they were that age concludes they're… https://t.co/w1AkrpGnyM— Luke Kawa (@Luke Kawa)1555960438.0
At $218,000, Millennials' median mortgage debt on principal residences is almost twice that of young Gen-Xers, at $117,500.
Millennials must also contend with greater income inequality: "Millennials in the top 10% held 55% of all total net worth accumulated by their generation."
Moreoever, while the net worth of Millennials in the top 25% is about twice that of young Gen-Xers in the top 25%, the net worth of Millennials in the bottom 25% is only about 50% greater than that of Gen-Xers in similar economic standing.
Inequality and debt, of course, undermine economic mobility and reinforce each other.
It will take reform and structural change to make Canadian society more equitable for Millennials.
Review the entire report from Statistics Canada here.