Here’s a brutal statistic: One poll found52 percent of Americans under the age of 45 have either lost their job, been put on leave, or had their hours dramatically cut as a result of the coronavirus pandemic, compared to 26 percent of peopleover the age of 45.
In other words, millennials are going to bear the brunt of this economic crisis, just as they did in 2008. The Great Recession upended the economy as many millennials were entering the labor force for the first time. The pandemic and the resulting economic shock have hit as many are entering their 30s and could erase any gains they’ve made.
Millennials, Lowrey argues, have never really had any economic security, and this pandemic all but guarantees “that they will be the first generation in modern American history to end up poorer than their parents.”
I spoke to Lowrey about what makes the plight of millennials “unusually bad,” why this crisis is especially devastating for young workers, and if she thinks millennials have a chance to escape the financial precarity that has defined their lives so far.
A lightly edited transcript of our conversation follows.
Sean Illing
Every generation seems to get screwed economically, at least once or twice. What’s unique about the plight of millennials?
Annie Lowrey
You’re definitely right about that, and I’m not trying to hold a misery Olympics here. I don’t even think millennials are a historically screwed generation compared to all the generations that preceded us going back to time immemorial. But it’s also true that there’s a huge economic body of literature that shows that graduating into a recession, like millennials did in 2008 and 2009, is unusually bad.
Sean Illing
Unusually bad in what ways?
Annie Lowrey
The word they use in the economic literature is “hysteresis,” which basically just implies a scarring. So you get these scars in the labor market and it takes a very long time to heal. If you graduate into a recession, for example, it leads to high unemployment and large earnings losses at the time, which you would expect. And then, it leads to lower earnings trajectories for decades and even a lifetime, which is maybe more unexpected. It basically means that you don’t rebound in the way that other people rebound.
So all this means that millennials have not had the same wealth trajectory compared to previous generations. And you can see this when you compare their wealth at the same point in their life cycle with older generations — millennials are just doing worse. And that’s after a decade of economic growth.
I think there’s something really discomforting in that because it means some kind of stratification on the basis of age, but it also means that decades of economic advancement didn’t do anything for a whole generation of people.
Sean Illing
How much of this economic precarity for millennials is about bad timing, about the reality of entering the labor force during a massive recession, and how much of it is about the nature of capitalism today and the kind of world it has wrought?
Annie Lowrey
It’s a little of both, right? Some of it is just an accident of timing, but there’s also the reality that millennials were thrown into an economy that was structured to manufacture precarity for them. So obviously a big factor is the Great Recession, which just took money out of their pockets and made it a lot harder for them. The second is the cost of going to college. Millennials have racked up more than a half-trillion dollars of student loan debt. That has had the effect of depressing their take-home pay and it’s made it really hard for them to buy houses, start businesses, start families, have children, and so on.
Millennials have largely been shut out of the housing market, in part because of a massive housing crisis that they didn’t cause, and this happened at a time when the prices were going up. So you had this nice wealth effect that really benefited older generations, especially baby boomers, and millennials instead had to keep on renting. And there’s about an eight percentage point gap between where we would expect the millennials to be and where they are in terms of home ownership, so that’s another big thing.
There are just a hundred threads you could pull on here. The fact that jobs are precarious and a lot of millennials have been stuck in piecemeal or gig work with no real security is obviously a problem. There are significant racial dynamics at work, too. Millennials are a really diverse generation, but white millennials have done a lot better than black millennials in particular.
Sean Illing
So millennials were thrown off course by the Great Recession and now we’re facing another cataclysmic economic event with this pandemic. This crisis is hammering every demographic in different ways and at different levels. How will it impact millennials in particular?
Annie Lowrey
It’s a great question, and we just don’t have a lot of great data on what is happening with the economy right now. Our best data tends to be backward-facing, and it’s still not capturing everything that’s going on in the labor market in the economy right now. We’ll have a lot better sense in a couple months.
All that said, the data that do we have from things like polls and credit card processors is terrifying. It shows that millennials are experiencing something somewhat different than older generations. Data for Progress just came out with a report that suggests that more than half of people under the age of 45 have lost their job, been put on leave, or had their hours reduced. And that’s roughly twice the rate of people over the age of 45. And I think that that makes some sense because millennials are disproportionate holders of a lot of the jobs that we know have been wiped out in the most dramatic terms — things like restaurants and bars, health clubs, yoga studios, or retail.
Older generations are likely to see more wealth losses as a result of this because they’re the ones who hold the most wealth. Millennials aren’t really holding a lot of stocks. They don’t own a lot of houses, but boomers do. And so, because of the decline in asset values, those paper losses will be actually relatively restrained for millennials. But that’s not really a good thing. In terms of income losses, I think that this is not going to be good for anybody — and I would really stress that: This is just an awful situation for everyone — but in terms of income losses, at least for right now, it seems like it’s concentrated among young workers.
Sean Illing
There’s the debt trap, the home ownership problem, the affordability crisis, the lack of wealth accumulation, an unforgiving labor market — all the things that keep millennials on shaky economic ground. In these sorts of conversations, “neoliberalism” is the default boogeyman, the thing we blame for creating this precarious world we’ve inherited. What’s your origins story here? Who or what do you blame?
Annie Lowrey
I think that there is a lot of blame to go around here, but I would step back and just say that this is the system that we have elected. We choose this system of laws and economic structures. None of this is a given. There’s no “invisible hand” insisting that we have precarity all the time. We choose this. We choose these rates of inequality, this racial wealth gap, we elected it. We choose to not help parents out until their kid is 5 with public education. We could’ve chosen another system, another world, like other countries have.
All of these are solvable problems in terms of policy. In a lot of ways, this isn’t even hard stuff. We’ve just chosen not to do it. Explaining why we’ve done this is just way above my pay grade. I would say that race is a huge part of it. We’ve chosen not to have this system I think in no small part because we’ve elected to make sure that white people have security that black families don’t. And this is the result.
Sean Illing
I completely agree, but I just want to be clear right here because I know a lot of people will read this and say, “I didn’t choose this! I don’t want this,” and they’re obviously right. So I think we should be explicit about the “we” in your formulation.
Annie Lowrey
Absolutely. I’d say that these social programs I’m talking about, like universal pre-K for all Americans, are really pretty popular. But I think that we have a system of government that doesn’t reflect that popularity necessarily. So the “we” here is just us as a collective, and particularly the people with their hands on the levers of power.
But you’re obviously right, there have been people pushing back against this for decades. So it’s hard to say who wants this and who doesn’t. I think the key point is that this isn’t merely a market outcome. The world we have has been shaped by policies our government has chosen. That’s so important to remember.
Sean Illing
We’re still on the front end of this crisis and no one knows what’s coming, but what’s your best guess of what the economic order will look like on the other side of this pandemic?
Annie Lowrey
That’s the question, right? I wish I knew. I think that economists are currently concerned that we are going to face a terrible snowballing recession that comes from business failures and sickness and loss of insurance on the other side of this. And I just don’t know that we have any idea of how we’re going to rebound from that.
You have optimists who are saying that we could still have a V-shaped recovery because the economy was pretty good going in, and this was like a gargantuan hurricane that came in and will pass over us in time. But I think now there’s a lot more concern that so much economic damage is accumulating that you’re going to end up with a pretty nasty long recession.
One thing we know is that younger workers who were more fragile are already being more hard hit. Older folks will suffer greater wealth losses, but at least they had that wealth cushion. I’m really worried about the children of millennials who are living in these homes that have been shattered by this crisis. I’m concerned about the intergenerational effects of this. How many kids are going to be food insecure? How many kids are going to be out of school for months and months and in really unstable housing and economic situations?
We have this whole generation of workers that have never really had any security to begin with, and now they’re being decimated again. It’s just awful and we still don’t have a real understanding of how bad it will get.
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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
