This essay deserves to be widely shared- it is well written and on point. Perhaps our biggest problem as a society is the ease of donning the mantle of victimhood.
N.IRELAND (UK) -- My great grand parents lived in Belfast workers house. 2 bedroom no bathroom etc. He worked at Harland and Wolff (where Titanic was built). They had 6 children and one on the way when he was killed in an explosion. His wife died a year after her last baby was born. My grandmother, the eldest raised her siblings. After years of belonging to the church, she asked for help. They insisted that she tell her story and plead every week. Instead she made boiled sweets, sold shoelaces and SAVED. As each male sibling reached 14 years old, she bought a ticket to Canada hoping her brothers would avail of the land on offer. After all the children were raised and gone or married, she married a WW1 veteran and 9 children, some died, my own mother was her youngest. My mother married a very anti social off grid man - we grew up like our grandparents. 5 daughters of which I am the youngest (57). We worked hard from when we could walk and carry. I was growing potatoes and looking after chickens. this was in the 1970's! One thing I knew. I NEEDED a good education. So despite the odds (coming from a single classroom school with dry bucket toilet) I made it to a top school were I excelled - I got paid work from 14 years old and never stopped saving and educating myself. My nature is risk off, yet I studied BTC and ICO's and made some money years ago. I broke the chain of poverty and my only child now 23 is leaving to work in a prestigious job in Rome after attaining her degree in Mandarin, Japanese and French. I admit I influenced her somewhat in learning Mandarin (and living in Taipei) - I felt it was a good skill going forward into 21st century. She too worked from she was 14 years old. She saved in silver and sovereigns. She understands (at 23) that she must work at living through these inflationary times with caution. I always help - but only when she meets me halfway. so - 5 generations from Ireland - all hard working people - wanting their children to do better than themselves.
it was tough - the first half of my life had the backdrop of terrorism. There just wasn't any opportunities for a career. I guess I could have moved abroad, but it would mean leaving my mom alone. Just couldn't do it.
Thank You Jay for this very relevant piece. I hear this all the time and I say basically the same back to the youngins. I am 55, grew up in the Okanagan but after 2 years of college, had to leave this beautiful valley in 1990 because there was no work and no money (an era of high interest rates) and I. had no one to help me, everyone was poor! I went to Yukon and never looked back. I tell people all the time, go to where there's money if you can't find it here. Go! You are not entitled to stay somewhere that you "want" to stay. And...we worked harder when I was growing up. People had more "GRIT".
Great article. I’m a senior…worked very hard for 48 years. No holidays, lots of sacrifices, saved money, no government handouts. Generation squeeze only creating a generational war and trudeau’s behind it. They cannot steal what we worked so diligently and fiscally responsibly now.
Amen! Great post Jay. I was just wondering lately why my business is a little bit stagnant and I realized after reading your post that I’m not competing to the level that I used to. It’s time to go and compete again. Thank you!
All true and I have a similar story and ancestry. I've also built wealth from a ground up with some help from hard working parents. One thing I want to add here is that we are in a late stage of our civilization where hard work may NOT pay off. Where one can go out a do all the things you recommend and it simply be absorbed into a rent seeking oligopoly. This is what our children are faced with and it's real.
I agree with the sentiment of the article but to say that people can just work harder is out of touch with reality.
Here is a breakdown of income percentiles in Canada based on recent data:
- Top 1%: Canadians in the top 1% earn at least $258,034 annually .
- Top 10%: To be in the top 10%, you need to earn at least $102,400 per year. The average income for this group is around $176,700 annually.
The average 3 bedroom home price in the greater Vancouver area is $1.7m.
Based on the rule of thumb that 30% of after tax income should go towards a mortgage, that means someone making $260k a year ($160k after tax) should be paying $4k in mortgage payments.
At 5% mortgage rates that’s a $745k mortgage over 30 years. Assuming 20% down payment, that’s a $930k house with $185k down.
So the top 1% of wage earners are priced out of the housing market in Canadas two most populace and productive cities (Vancouver and Toronto).
If the top 1% of wage earners can’t buy a house that’s a broken society, not a work ethic problem.
The bigger problem in my mind is that the top 1% is only at $260k. There’s plenty of reasons that the socialist state of Canada is having these problems, but I don’t think work ethic is the big one. More likely over taxation, redistribution of wealth, etc that you mentioned.
I think you’re correct in the analysis that the problem can’t be solved by redistribution but it’s unfair to say people just don’t work hard enough.
But are they legally bound to greater Vancouver or Toronto? I agree that housing is unaffordable; I think I mentioned that a few times in the article. However, I disagree that unaffordable housing makes life unfair relative to previous generations.
"The average 3 bedroom home price in the greater Vancouver area is $1.7m.". Sure, but you can buy a 5-bedroom house in Edmonton for $500k. -> https://tinyurl.com/mphyjz4s
When my wife and I started a family, we wanted to stay in Vancouver, but we couldn't afford it at the time, so we left. My grandfather had to leave the country. My great-grandfather had to cross the ocean. Leaving the city is a small sacrifice by comparison.
People live where there are jobs, opportunities, etc. Just like when your ancestors moved. If there were opportunities in Edmonton, people would move there.
What would happen to prices in Edmonton if everyone from Vancouver were to move there?
It’s not about life being unfair vs previous generations. It’s about upward mobility decreasing. It is about an economy that rewards those with assets while the barrier to entry to owning assets increases each year.
Of course life is easier today than it was 150 years ago and it was that much easier 150 years ago compared to 300 years ago. You just compare the barrier to entry to what is deemed an “average lifestyle”. That barrier has increased, not just in Vancouver or Toronto, but all over western society.
However, Canada is on the extreme end of the curve because of its policies. Just south of the border, in the US, the top 1% and 10% income thresholds are $600k and $215k respectively.
I have moved all around for my career and quality of life, and will continue to. My life is great. Yet, very aware of the situation of the average person.
I think you can see the frustration very clearly through populist movements right now. Very similar to other times of extremes between the haves and have nots such as France pre-revolution.
Well, there are lots of opportunities in places like Edmonton - most notably higher household incomes than in BC. But you have to leave the mountains, ocean, temperate climate and city behind - which is the sacrifice most people aren't willing to make. It is easier to point the finger and call the city "broken." But it's not broken, it's just expensive. The prices reflect the market. As long as there is a market for those prices, it's not broken. If the market dried up, homeowners became underwater on their mortgages and developers backward on their buildings; then the market would begin to "break." (and maybe that will happen). Vancouver, specifically (which was not the point of my essay above), is safe, clean, predictably governed, beautiful in every direction, and open to capital from all over the world. It would be illogical for prices to be anything except very expensive.
But it's also never been easier to work in one place while living elsewhere. I employ 12 people - none of them live in the same town as me, and I employ both specialists and generalists. That sort of optionality has never existed to this extent.
I am not saying that life isn't hard. I am saying that life has always been hard. And upward mobility has always required extraordinary sacrifice. It does today, and it always has.
I do agree with your point on Edmonton but surely you have to see what I am talking about as a whole for society.
This is not about Vancouver, that city is just an example of the craziness that goes on in the world today.
It is a bit disingenuous to say that it is just the market, because it is not. It’s a very captive market. Rent control and permitting restrictions alone are econ 101 on how to artificially inflate asset prices. It’s also a dirty city full of drug addicts openly using on the street in every part of downtown.
It’s hard for me to agree that a city where the top 1% of wage earners can’t afford an average house is not broken.
Even LA is not broken like Van because wages match real estate prices there.
The real point was that you have to have an honest conversation when talking about these subjects and a lot of it starts w the data as a whole.
In 1940 90% of 30 year olds made more than their parents when they were 30 (inflation adjusted). Today that number is 50%.
So yes, life is hard and it always has been, but upward mobility is getting harder with each passing year, statistically. Look at the decoupling of wages and productivity as well.
I’m not complaining about the opportunities today, I see them in abundance in my life. But, not everyone has the same opportunities and the data shows that for the average person it is getting harder to get ahead.
Same line of work for 50 years. In my twenties, 60% of my income was disposable. In my sixties, I worked Way harder, smarter, faster, and disposable was 5%! By and large, N.A. service workers, (70% of working pop.} can now barely afford Rent, and\or their own product!, while the concentration of wealth accelerates at breakneck speed. Henry Ford is surely turning in his grave. I've been blessed with friends from all over the income ladder, and must admit, Ivory Towerism, like hypertension, is truly insidious in its subtly.
Mike
Oops, almost forgot, My one legged Grandpa had to snowshoe 8 miles, barefoot, to school, 4 times a day (no school lunches)! ; ))
Jay, after a careful read of your piece on "Generation Squeeze", I take your point that we must "choose to promote productivity, but instead choose to promote wealth redistribution".
I'm 63, and own a modest home near Vancouver... but I note that my 30 yr old son, who earns well, chooses to be politically inert, uninvolved in troubling his mind with all the negative aspects of our governments' dysfunctional policy initiatives, choosing instead to focus only on earning a good income.
But I agree with Gen Squeeze that today's income-to-mortgage ratio is all out of whack, compared to 50 years ago.
The problem is that Gen Xers are not willing to explore and politically counter the root causes of this unaffordability, which includes unrestricted foreign investment hitting our shores, and needlessly inflating the cost of housing.
Investment into multiple residential properties should be restricted to *one* rental property per Canadian citizen (no corporations!!). Housing should be treated as a human right, not an investment commodity - housing is simply the lowest hanging fruit in the "investment" world, and should not be exploited for profit on a wholesale basis. To be considered an "investor", people should be channeled into seeking investments such as commercial real estate, small businesses, stocks, etc. Owning 200 or 300 residential housing units should be TOTALLY off the table.
As a health professional, I do not get a pension funded partially from a company, like you “ probably do”. I will have to rely on an rsp and a few residential properties I purchased thru my Holding Company Corporation.
Where did the title come from? I'm guessing the "Generation Squeeze" website? Steal things and then complain about inflation, as if theft doesn't also cost consumers.
My family immigrated from Scotland to Ireland to India to South Africa and currently Canada
My grandfather was orphaned at 8 in SA had his first business at 12 was the first man to bring autos to the diamond fields . Went broke and lost everything 3 times yet ended up leaving $200,000 for each of his 3 daughters in 1964 ( also $1,000,000).
My history as an immigrant to Canada is rock and roll up and down. However, in spite of the supposed generational unfairness our daughter is more a chip off the old block.
She graduated from McGill (arts no Financial asset).
She is 35 and soon to be a mom, she has been in 6 start up companies, got her green card and making tons $. Owns a house in LA ( not cheap). Has a wonderful husband who started in trades as a tool and die maker, now runs crews in the aerospace business, recently providing key parts to Boeing.
Generational squeeze, BS!!
The only thing is they had to leave Canada because our government is incompetent at providing the environment for good capable people to succeed in. If they do succeed in this socialist environment then our government wants steal it and redistribute it.
I love Canada but hate socialism and graft and corruption of our government
I enjoyed your article! Why is it hard to read it entirely without leaving to get a password and then logging in. In general, things in life that are hard to start don’t get finished.
This essay deserves to be widely shared- it is well written and on point. Perhaps our biggest problem as a society is the ease of donning the mantle of victimhood.
Thanks Julie!
N.IRELAND (UK) -- My great grand parents lived in Belfast workers house. 2 bedroom no bathroom etc. He worked at Harland and Wolff (where Titanic was built). They had 6 children and one on the way when he was killed in an explosion. His wife died a year after her last baby was born. My grandmother, the eldest raised her siblings. After years of belonging to the church, she asked for help. They insisted that she tell her story and plead every week. Instead she made boiled sweets, sold shoelaces and SAVED. As each male sibling reached 14 years old, she bought a ticket to Canada hoping her brothers would avail of the land on offer. After all the children were raised and gone or married, she married a WW1 veteran and 9 children, some died, my own mother was her youngest. My mother married a very anti social off grid man - we grew up like our grandparents. 5 daughters of which I am the youngest (57). We worked hard from when we could walk and carry. I was growing potatoes and looking after chickens. this was in the 1970's! One thing I knew. I NEEDED a good education. So despite the odds (coming from a single classroom school with dry bucket toilet) I made it to a top school were I excelled - I got paid work from 14 years old and never stopped saving and educating myself. My nature is risk off, yet I studied BTC and ICO's and made some money years ago. I broke the chain of poverty and my only child now 23 is leaving to work in a prestigious job in Rome after attaining her degree in Mandarin, Japanese and French. I admit I influenced her somewhat in learning Mandarin (and living in Taipei) - I felt it was a good skill going forward into 21st century. She too worked from she was 14 years old. She saved in silver and sovereigns. She understands (at 23) that she must work at living through these inflationary times with caution. I always help - but only when she meets me halfway. so - 5 generations from Ireland - all hard working people - wanting their children to do better than themselves.
Wow - very cool. Thank you, Paola - and congrats on your daughter's success.
thank you Jay
Good on you!!
That is Grit!!
it was tough - the first half of my life had the backdrop of terrorism. There just wasn't any opportunities for a career. I guess I could have moved abroad, but it would mean leaving my mom alone. Just couldn't do it.
Thank You Jay for this very relevant piece. I hear this all the time and I say basically the same back to the youngins. I am 55, grew up in the Okanagan but after 2 years of college, had to leave this beautiful valley in 1990 because there was no work and no money (an era of high interest rates) and I. had no one to help me, everyone was poor! I went to Yukon and never looked back. I tell people all the time, go to where there's money if you can't find it here. Go! You are not entitled to stay somewhere that you "want" to stay. And...we worked harder when I was growing up. People had more "GRIT".
Agreed. My wife and I got chased out of Vancouver when we started having kids - it ended up being the best thing for us.
Agreed 100%. Wealth can only truly be enjoyed when it is earned through hard work and personal sacrifice.
Agreed
The people I am most grateful to, are those that told me what I did not want to hear. Ruthlessness is a teacher. Thank you for your essay.
Agreed, and thank you
Great article. I’m a senior…worked very hard for 48 years. No holidays, lots of sacrifices, saved money, no government handouts. Generation squeeze only creating a generational war and trudeau’s behind it. They cannot steal what we worked so diligently and fiscally responsibly now.
Thanks Linda!
Great message. Well done!
Thank you Colin!
Good optics, teach them how to fish. Don't just give them fish.
Amen! Great post Jay. I was just wondering lately why my business is a little bit stagnant and I realized after reading your post that I’m not competing to the level that I used to. It’s time to go and compete again. Thank you!
Love that. Lets Go!
All true and I have a similar story and ancestry. I've also built wealth from a ground up with some help from hard working parents. One thing I want to add here is that we are in a late stage of our civilization where hard work may NOT pay off. Where one can go out a do all the things you recommend and it simply be absorbed into a rent seeking oligopoly. This is what our children are faced with and it's real.
I agree with the sentiment of the article but to say that people can just work harder is out of touch with reality.
Here is a breakdown of income percentiles in Canada based on recent data:
- Top 1%: Canadians in the top 1% earn at least $258,034 annually .
- Top 10%: To be in the top 10%, you need to earn at least $102,400 per year. The average income for this group is around $176,700 annually.
The average 3 bedroom home price in the greater Vancouver area is $1.7m.
Based on the rule of thumb that 30% of after tax income should go towards a mortgage, that means someone making $260k a year ($160k after tax) should be paying $4k in mortgage payments.
At 5% mortgage rates that’s a $745k mortgage over 30 years. Assuming 20% down payment, that’s a $930k house with $185k down.
So the top 1% of wage earners are priced out of the housing market in Canadas two most populace and productive cities (Vancouver and Toronto).
If the top 1% of wage earners can’t buy a house that’s a broken society, not a work ethic problem.
The bigger problem in my mind is that the top 1% is only at $260k. There’s plenty of reasons that the socialist state of Canada is having these problems, but I don’t think work ethic is the big one. More likely over taxation, redistribution of wealth, etc that you mentioned.
I think you’re correct in the analysis that the problem can’t be solved by redistribution but it’s unfair to say people just don’t work hard enough.
But are they legally bound to greater Vancouver or Toronto? I agree that housing is unaffordable; I think I mentioned that a few times in the article. However, I disagree that unaffordable housing makes life unfair relative to previous generations.
"The average 3 bedroom home price in the greater Vancouver area is $1.7m.". Sure, but you can buy a 5-bedroom house in Edmonton for $500k. -> https://tinyurl.com/mphyjz4s
When my wife and I started a family, we wanted to stay in Vancouver, but we couldn't afford it at the time, so we left. My grandfather had to leave the country. My great-grandfather had to cross the ocean. Leaving the city is a small sacrifice by comparison.
It is not as simple as that.
People live where there are jobs, opportunities, etc. Just like when your ancestors moved. If there were opportunities in Edmonton, people would move there.
What would happen to prices in Edmonton if everyone from Vancouver were to move there?
It’s not about life being unfair vs previous generations. It’s about upward mobility decreasing. It is about an economy that rewards those with assets while the barrier to entry to owning assets increases each year.
Of course life is easier today than it was 150 years ago and it was that much easier 150 years ago compared to 300 years ago. You just compare the barrier to entry to what is deemed an “average lifestyle”. That barrier has increased, not just in Vancouver or Toronto, but all over western society.
However, Canada is on the extreme end of the curve because of its policies. Just south of the border, in the US, the top 1% and 10% income thresholds are $600k and $215k respectively.
I have moved all around for my career and quality of life, and will continue to. My life is great. Yet, very aware of the situation of the average person.
I think you can see the frustration very clearly through populist movements right now. Very similar to other times of extremes between the haves and have nots such as France pre-revolution.
Well, there are lots of opportunities in places like Edmonton - most notably higher household incomes than in BC. But you have to leave the mountains, ocean, temperate climate and city behind - which is the sacrifice most people aren't willing to make. It is easier to point the finger and call the city "broken." But it's not broken, it's just expensive. The prices reflect the market. As long as there is a market for those prices, it's not broken. If the market dried up, homeowners became underwater on their mortgages and developers backward on their buildings; then the market would begin to "break." (and maybe that will happen). Vancouver, specifically (which was not the point of my essay above), is safe, clean, predictably governed, beautiful in every direction, and open to capital from all over the world. It would be illogical for prices to be anything except very expensive.
But it's also never been easier to work in one place while living elsewhere. I employ 12 people - none of them live in the same town as me, and I employ both specialists and generalists. That sort of optionality has never existed to this extent.
I am not saying that life isn't hard. I am saying that life has always been hard. And upward mobility has always required extraordinary sacrifice. It does today, and it always has.
I do agree with your point on Edmonton but surely you have to see what I am talking about as a whole for society.
This is not about Vancouver, that city is just an example of the craziness that goes on in the world today.
It is a bit disingenuous to say that it is just the market, because it is not. It’s a very captive market. Rent control and permitting restrictions alone are econ 101 on how to artificially inflate asset prices. It’s also a dirty city full of drug addicts openly using on the street in every part of downtown.
It’s hard for me to agree that a city where the top 1% of wage earners can’t afford an average house is not broken.
Even LA is not broken like Van because wages match real estate prices there.
The real point was that you have to have an honest conversation when talking about these subjects and a lot of it starts w the data as a whole.
In 1940 90% of 30 year olds made more than their parents when they were 30 (inflation adjusted). Today that number is 50%.
So yes, life is hard and it always has been, but upward mobility is getting harder with each passing year, statistically. Look at the decoupling of wages and productivity as well.
I’m not complaining about the opportunities today, I see them in abundance in my life. But, not everyone has the same opportunities and the data shows that for the average person it is getting harder to get ahead.
Same line of work for 50 years. In my twenties, 60% of my income was disposable. In my sixties, I worked Way harder, smarter, faster, and disposable was 5%! By and large, N.A. service workers, (70% of working pop.} can now barely afford Rent, and\or their own product!, while the concentration of wealth accelerates at breakneck speed. Henry Ford is surely turning in his grave. I've been blessed with friends from all over the income ladder, and must admit, Ivory Towerism, like hypertension, is truly insidious in its subtly.
Mike
Oops, almost forgot, My one legged Grandpa had to snowshoe 8 miles, barefoot, to school, 4 times a day (no school lunches)! ; ))
Jay, after a careful read of your piece on "Generation Squeeze", I take your point that we must "choose to promote productivity, but instead choose to promote wealth redistribution".
I'm 63, and own a modest home near Vancouver... but I note that my 30 yr old son, who earns well, chooses to be politically inert, uninvolved in troubling his mind with all the negative aspects of our governments' dysfunctional policy initiatives, choosing instead to focus only on earning a good income.
But I agree with Gen Squeeze that today's income-to-mortgage ratio is all out of whack, compared to 50 years ago.
The problem is that Gen Xers are not willing to explore and politically counter the root causes of this unaffordability, which includes unrestricted foreign investment hitting our shores, and needlessly inflating the cost of housing.
Investment into multiple residential properties should be restricted to *one* rental property per Canadian citizen (no corporations!!). Housing should be treated as a human right, not an investment commodity - housing is simply the lowest hanging fruit in the "investment" world, and should not be exploited for profit on a wholesale basis. To be considered an "investor", people should be channeled into seeking investments such as commercial real estate, small businesses, stocks, etc. Owning 200 or 300 residential housing units should be TOTALLY off the table.
BAM! I refuse to buy Reits, no matter how great the dividend!!!
So Peter,
As a health professional, I do not get a pension funded partially from a company, like you “ probably do”. I will have to rely on an rsp and a few residential properties I purchased thru my Holding Company Corporation.
Where did the title come from? I'm guessing the "Generation Squeeze" website? Steal things and then complain about inflation, as if theft doesn't also cost consumers.
"I steal, only what I can't afford" - theme song from Aladdin. (I've got 3 young kids :)
Jay
My family immigrated from Scotland to Ireland to India to South Africa and currently Canada
My grandfather was orphaned at 8 in SA had his first business at 12 was the first man to bring autos to the diamond fields . Went broke and lost everything 3 times yet ended up leaving $200,000 for each of his 3 daughters in 1964 ( also $1,000,000).
My history as an immigrant to Canada is rock and roll up and down. However, in spite of the supposed generational unfairness our daughter is more a chip off the old block.
She graduated from McGill (arts no Financial asset).
She is 35 and soon to be a mom, she has been in 6 start up companies, got her green card and making tons $. Owns a house in LA ( not cheap). Has a wonderful husband who started in trades as a tool and die maker, now runs crews in the aerospace business, recently providing key parts to Boeing.
Generational squeeze, BS!!
The only thing is they had to leave Canada because our government is incompetent at providing the environment for good capable people to succeed in. If they do succeed in this socialist environment then our government wants steal it and redistribute it.
I love Canada but hate socialism and graft and corruption of our government
I enjoyed your article! Why is it hard to read it entirely without leaving to get a password and then logging in. In general, things in life that are hard to start don’t get finished.