Thursday 7 February 2013

Who'll buy boomers' houses?

And to make things worse, 60% graduate with an average debt of $27,000.  Mired in debt, and working in dead end jobs, their launch into adulthood is being curtailed.  Some call them “the lost generation”.  But, it’s not only young people who may be lost.  If the next generation fails to gain a toehold into the economy, who’ll buy boomer’s houses?  Who’ll pay for social programs? Youth unemployment and underemployment is a ticking time bomb with serious consequences for everyone.

Generation Jobless delves into why so many young Canadians are overeducated and underemployed.  The reality is that today’s twenty-something’s are entering  an economy in the throes of a seismic shift where globalization and technology are transforming the workplace. Automation is replacing tens of thousands of jobs at a time.  Companies fixated on the bottom line are outsourcing jobs and wherever possible getting computers to do the work.  Employers are placing a higher premium on experienced workers, unwilling to invest in training new entrants to the workforce. So, young people are caught in a catch 22.  How do you get experience if no one will hire you without it? Many are working for free as unpaid interns, just to try and get their foot in the door.  And, for the first time in history youth are facing another unique challenge  – competition with their parents’ generation for the small pool of jobs that do exist. Boomers who are delaying retirement. 

I couldn’t agree more with this article as I myself belong to “generation jobless” and so does everyone in my social circle. Most of my friends have student loans north of $30,000, low paying entrĂ©e jobs, and many keep bouncing between random apartments and parents' basements.

That’s what degrees in accounting, behavioral therapy, and economics got us. Ironically, those of my friends who did not go to university were the only ones who are making six digits incomes and have zero debt.

I would add one more point to this article. Most of the job prospects for the younger generation lay outside big cities. For the past several decades we had a massive influx of people from rural areas to urban megacities, which left many unoccupied positions in the country side.  A teachers college grad I know just got a job offer in a small town in the northern BC, which he politely refused as he is keen on city living. Another friend got offered an accounting position in Northern Ontario, but Timmins was too far from Toronto’s entertainment district.

My point is that our young generation is so accustomed to city living that most of us would never even consider moving to the country side for a job opening.  Look - most of us want to sit in a Starbucks drinking blond roast, wear trendy clothes and browse BuzzFeed on an iPad. Most of us don’t want to get out of our comfort zone... which is the city.

So basically this leaves us with a generation of overeducated, underemployed, indebted spoiled brats who do not want to move for a job offer. Question is, if generation jobless can either move out of the city to get a job, or stay underemployed for years in the city, who on earth is going to buy all those condos in downtown Toronto?   


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