Despite assumptions Generation Y is having a tougher go at it than their parents, Millennials have a better chance at landing a job and earning more than some baby boomers, according to a Bank of Montreal (BMO) study.
But when it comes to buying home, Millennials — those born between 1981 and 2001 — face house prices more than 10 times the median income of young families. That’s more than double the ratio from the 1980s.
"Millennials would be forgiven for thinking their parents had a big financial head-start, and that they will become the first generation to do worse than their ancestor," SMO senior economist Sal Guatieri wrote in the May 15 report.
"However, apart from taking on bigger loans to buy pricier homes, young Canadians today enjoy better job prospects, earn more and are wealthier than in the 1980s."
The study used data from Statistics Canada to determine young people looking for a job today have a 93% of finding one compared to the early 1980s, when baby boomers’ chances were at 90%.
BMO also noted median net worth of households headed by someone 25- to 34-years-old was $52,000 in 2012. In 1984, that figure was just $29,000 in 2012 dollars.
When adjusted for inflation, the median income of people 25- to 34-years-old was $33,900 from 1984-88 compared to $34,700 in 2011.
This means Millennials have 2% more buying power for goods and services.
"One caveat is that median income was higher in the 1970s, before the 1980s' recession took a severe toll on workers, so the starting point for our comparison matters,” Guatieri said.
