Why you're poorer than your parents

Incomes for young Canadians are falling, even while incomes for retirees soar. What's going on?

Muhammad Ali Jabbar considers himself one of the lucky ones. When he graduated with a degree in mechanical engineering from Toronto's Ryerson University last year, the 25-year-old Milton, Ont., resident already had a decent-paying job lined up in his field. But even so, he finds himself struggling to pay his mortgage, his $30,000 student loan and $15,000 line of credit. "Basically all the money I make goes to paying bills," he says. "I wasn't able to make my payments last month and I got a call from a collection agency. It's discouraging."

Jabbar lived with his parents while he was at university, and held down various jobs to pay for it-he worked at a gas station, he was in the Canadian Forces reserves, and he was the student union president. But he never made enough to cover his $6,200 tuition. Now he's weighed down by such a large debt that he and his wife have decided to hold off on having kids, as he's worried about "having more people to feed."

Many other young families are finding themselves in a similar bind-and the recent recession has shouldered most of the blame. But is this really just a short-term blip that will evaporate over the next few years? Or is there a deeper problem here? To find out, MoneySense commissioned researcher Roger Sauvé to dig through piles of Statistics Canada data to find out how the incomes for different age groups have changed over the 30-year period between 1978 and 2008. He discovered that the high unemployment and low wages that young Canadians ran into during the recession were just the latest in a long string of losses. Even before the recession hit, young Canadians had been losing income and wealth to older generations for years. (more)