National Economy

[acottawa]

Originally Posted by Innsertnamehere

a floor-manager chemical engineer in his 40's with a working spouse on average could definitely afford $1.1 million. They would have 10-15 years of house equity built up at that point to put towards the mortgage. Ain't nobody going out and buying an upper-middle class home as their first property - that's the case today and it was the case back then.

Was your grandfather in his 40s when he bought the Scarborough House?

[Innsertnamehere]

Originally Posted by Truenorth00

This is exactly it.

I guess we'll just have to wait a decade for younger Millennials and Zoomers to bring down statistical averages before people can actually admit we have a problem.

you may be waiting a while..

https://www150.statcan.gc.ca/n1/pub/...019006-eng.htm

Millennials are wealthier on average than any previous generation at the same age in Canada.

Consistent with rising income levels across generations, assets, debts and net worth were also higher for millennials compared to young Gen-Xers. Median net worth, defined as total household assets less debts, was higher for millennials than for young Gen-Xers. By 2016, millennials aged 25 to 34 had accumulated a median net worth of $70,600—over one and half times the levels reached by Gen-Xers at the same age in 1999 ($42,800) (Chart 2).

[Innsertnamehere]

Originally Posted by acottawa

Was your grandfather in his 40s when he bought the Scarborough House?

He was born in 1929 and the house was built around 1970 I believe.. so yes.

[thewave46]

Originally Posted by Innsertnamehere

you may be waiting a while..

https://www150.statcan.gc.ca/n1/pub/...019006-eng.htm

Millennials are wealthier on average than any previous generation at the same age in Canada.

Sure, and most of the data stops at 2016.

Also, this tidbit:

"Among millennials when the major earner was between 30 and 34 years old and had a principal residence (about half of millennial families in this age range in 2016), net worth reached $261,900. By contrast, net worth for those without a principal residence was $18,400."

It's almost like those who got into a home early had a huge leg up. That's much harder to do now in 2023.

[Innsertnamehere]

Originally Posted by thewave46

Sure, and most of the data stops at 2016.

Also, this tidbit:

"Among millennials when the major earner was between 30 and 34 years old and had a principal residence (about half of millennial families in this age range in 2016), net worth reached $261,900. By contrast, net worth for those without a principal residence was $18,400."

It's almost like those who got into a home early had a huge leg up.

yea - again, picking out data to fit the narrative - if you ignore 60-70% of households, they aren't as wealthy!

Back to the "looking for the trees and missing the forest" again. There have always been lower income households, today, and in 1970 - owning a property back then launched your net worth just as it did today. That's not a new thing.

[thewave46]

Originally Posted by Innsertnamehere

yea - again, picking out data to fit the narrative - if you ignore 60-70% of households, they aren't as wealthy!

Back to the "looking for the trees and missing the forest" again. There have always been lower income households, today, and in 1970 - owning a property back then launched your net worth just as it did today. That's not a new thing.

The argument being that if housing is the rocket ship to being wealthy (the benefits of a stable living arrangement aside), and we continually move that upwards out of sight for those getting in, we are creating an ever larger group of people who will essentially be poor forever.

Hence the 'better/worse' dichotomy.

[goodgrowth]

It's a have/have not system though. The wealth generation at the top half is proportional the bottom half not having access. It's artificially induced scarcity. It splits society.

It's basically bitcoin or gold but for housing.

[Innsertnamehere]

Originally Posted by thewave46

The argument being that if housing is the rocket ship to being wealthy (the benefits of a stable living arrangement aside), and we continually move that upwards out of sight for those getting in, we are creating an ever larger group of people who will essentially be poor forever.

Hence the 'better/worse' dichotomy.

but my point is that even when you look at younger age groups, those supposedly who haven't been able to get on the "rocket ship" - you still see higher median net worths and incomes than any previous generation.

Again - the original question was "are people better off now than in 1970" - and the answer is unequivocally yes in almost every single dimension, unless you want to buy a detached home in Central Toronto or Vancouver. If you picked 100 random Canadians today and compared them to 100 random Canadians in 1970 - they would be living much better lives on average. Maybe some would be worse off, but most would be better. There were no qualifiers on the original question - we can find scenarios where certain sub-groups of the population are worse off like "non-home owning, no education, working class in Central Toronto" - but that accounts for a very small sub-grouping of Canada's population. The median Canadian's quality of life is far higher than in previous decades, and indeed, data seems to indicate that it continues to increase.

[Truenorth00]

The good thing is that if you have homeless people living beside millionaires, the averages say they are all better off..... Clearly, the CEO of CIBC is a moron....

[Innsertnamehere]

Originally Posted by Truenorth00

The good thing is that if you have homeless people living beside millionaires, the averages say they are all better off..... Clearly, the CEO of CIBC is a moron....

Good thing I'm using median data and not averages then!

Also - as I said, if you've seen me posting elsewhere you know I have deep concerns about housing in Canada right now and current immigration rates, etc impacting quality of life in Canada right now. Ultimately though, as of today, Data isn't showing the median Canadian experiencing real declines in quality of life.

[thewave46]

Originally Posted by Innsertnamehere

but my point is that even when you look at younger age groups, those supposedly who haven't been able to get on the "rocket ship" - you still see higher median net worths and incomes than any previous generation.

Again - the original question was "are people better off now than in 1970" - and the answer is unequivocally yes in almost every single dimension, unless you want to buy a detached home in Central Toronto or Vancouver. If you picked 100 random Canadians today and compared them to 100 random Canadians in 1970 - they would be living much better lives on average. Maybe some would be worse off, but most would be better. There were no qualifiers on the original question - we can find scenarios where certain sub-groups of the population are worse off like "non-home owning, no education, working class in Central Toronto" - but that accounts for a very small sub-grouping of Canada's population. The median Canadian's quality of life is far higher than in previous decades, and indeed, data seems to indicate that it continues to increase.

My argument is that - while on average - people are better off than in 1970, the increasing dichotomy of outcomes is actually a worse thing overall. Especially if it is tied to housing.

It's great if we can all be morons like Toronto Life Guy and somehow end up winners despite financial incompetence, but the reality is that Toronto Life Guy's lifestyle was 'paid for' disproportionately by those who either were shut out/had to take on huge debt to live in the same city years on. He relates the story of his kid treading water in that same city he one lived high in. Better that Toronto Life Guy never lived high/got cut off long ago and his kid could still reasonably afford to live today, because TLG is this country's past, not its future.

That is poised to get worse, as disproportionate amounts of government spending are directed at older people, whilst carrying the load of government debt racked up by those very same people. All the time while driving housing prices upwards out of sight for the next generation. The current goal seems to be 'fuck tomorrow' in 2023 Canada. Great if you don't have to pick up the pieces, but I plan to live awhile.

I'd rather an average be more reflective of 'an outcome of all' versus the 'peak and troughs cancelling each other out'.

[hipster duck]

Originally Posted by Innsertnamehere

Millennials are wealthier on average than any previous generation at the same age in Canada.

But this doesn't control for education levels of individuals, nor the number of income earners per household.

If a typical millennial household makes about a CPI-adjusted $4,000 more in 2016 than a Silent generation household did in 1976, that's a pretty sad indictment, given that the Silent generation household probably had a single income earner (the man), and only about 1 in 5 would have had a university degree.

Also, I'd prefer to see wealth statistics rather than wage income statistics, particularly since so many millennials direct their incomes to debt payments.

[Innsertnamehere]

Originally Posted by thewave46

My argument is that - while on average - people are better off than in 1970, the increasing dichotomy of outcomes is actually a worse thing overall. Especially if it is tied to housing.

It's great if we can all be morons like Toronto Life Guy and somehow end up winners despite financial incompetence, but the reality is that Toronto Life Guy's lifestyle was 'paid for' disproportionately by those who either were shut out/had to take on huge debt to live in the same city years on. He relates the the story of his kid treading water in that same city he one lived high in. Better that Toronto Life Guy never lived high/got cut off long ago and his kid could still reasonably afford to live today, because TLG is this country's past, not its future.

That is poised to get worse, as disproportionate amounts of government spending are directed at older people, whilst carrying the load of government debt racked up by those very same people. All the time while driving housing prices upwards out of sight for the next generation. The current goal seems to be 'fuck tomorrow' in 2023 Canada. Great if you don't have to pick up the pieces, but I plan to live awhile.

I'd rather an average be more reflective of 'an outcome of all' versus the 'peak and troughs cancelling each other out'.

That same article I posted about millennial wealth speaks to this a bit - the increase in median wealth and incomes comes mostly from increases in the upper quintile of the population, yes. But the lower tiers are mostly staying the same or increasing as well - lower tiers are not getting worse.

We can definitely discuss about how these increased fortunes could be spread around better - and that's an excellent question - my point was that there is far more wealth in Canada today than ever before and it's spread evenly enough through the population that the median Canadian household has significant material improvements of quality of life over the past.

And yea - Toronto and Vancouver have problems, nobody is debating that.. But Toronto accounts for about 7% of Canada's population. It's not all of Canada.

[Innsertnamehere]

Originally Posted by hipster duck

But this doesn't control for education levels of individuals, nor the number of income earners per household.

If a typical millennial household makes about a CPI-adjusted $4,000 more in 2016 than a Silent generation household did in 1976, that's a pretty sad indictment, given that the Silent generation household probably had a single income earner (the man), and only about 1 in 5 would have had a university degree.

Also, I'd prefer to see wealth statistics rather than wage income statistics, particularly since so many millennials direct their incomes to debt payments.

The same article I posted delves into this - and the qoute I posted from the article specifically addresses it:

Consistent with rising income levels across generations, assets, debts and net worth were also higher for millennials compared to young Gen-Xers. Median net worth, defined as total household assets less debts, was higher for millennials than for young Gen-Xers. By 2016, millennials aged 25 to 34 had accumulated a median net worth of $70,600—over one and half times the levels reached by Gen-Xers at the same age in 1999 ($42,800)

And sure, we can again put qualifiers to try to distill the data to fit a narrative - but at the end of the day, if you pick a random 35-year old Canadian today, they will be better off than a random 35-year old in 1990 or 1970.

[casper]

Originally Posted by Innsertnamehere

Good thing I'm using median data and not averages then!

Also - as I said, if you've seen me posting elsewhere you know I have deep concerns about housing in Canada right now and current immigration rates, etc impacting quality of life in Canada right now. Ultimately though, as of today, Data isn't showing the median Canadian experiencing real declines in quality of life.

Those of us that are pro-growth on the forum believe we need more immigration. I would agree this year is perhaps a bit excessive. Stating below 750,000 per year may be a good idea.

There are two ways of solving this problem. Reduce immigration and suffer the demographic and economic consequences. Alternatively we build more housing. I think the solution at the end of the day is to build more housing.

It is disappointing the free market has not stepped up and increased construction. This means government needs to step in a build social housing and co-op housing.

Looking at that graph it is clear until this year housing starts have been in sync. You need one new home for ever 2.4 new people added to the population.

[thewave46]

Originally Posted by Innsertnamehere

And sure, we can again put qualifiers to try to distill the data to fit a narrative - but at the end of the day, if you pick a random 35-year old Canadian today, they will be better off than a random 35-year old in 1990 or 1970.

I'd like to think 50+ years of wealth generation would do this, being a first-world economy and riding high commodity prices.

The larger issue I am having is the tone-deaf nature of the proponents of 'This is fine!' and seemingly perilous nature of the wealth. That, along with its concentration in certain segments of society to the detriment of others. Particularly if that concentration is not oriented to a successful future outcome.

That's also just notwithstanding the actual utility of a stable roof over one's head, regardless of its monetary value.

It's also why I'm dim on single metrics as the be all and end all of how things are going. A country can be wealthier on paper and worse off overall.

[Acajack]

For much of the 1970s my family lived in an 1800 sf 3-bedroom split level home on a 60x120 foot lot in Ottawa about 10 minutes from downtown.

My parents bought this house on my dad's income only with little savings and no help from their own parents, at the age of 25. Those houses sell for 999k in 2023.

Now that I think it was a bit of a golden age for my family in terms of travel (though we were never big overseas travellers, but did lots of road trips in eastern Canada and the NE US) and also doing stuff like going to shows and sporting events.

My dad's job had us move a bit and we moved to other regions, to less expensive and then more expensive places, including around the high interest rate period of the 1980s.

As I've mentioned before my parents took a hit and their finances never fully recovered, and neither did our family lifestyle even though we never wanted for much.

[goodgrowth]

A leading indicator of net worth:

[Truenorth00]

On the broader topic, I don't get how anybody can say all of this is healthy. Our economy is more dependent on the housing ponzi today than at any time in history.

[hipster duck]

Originally Posted by thewave46

The larger issue I am having is the tone-deaf nature of the proponents of 'This is fine!' and seemingly perilous nature of the wealth.

Paul Krugman had a similarly tone-deaf article in the NYT today. Surely, if these high level, aggregated economic statistics were reported under a Republican administration his article would have been the same?

But even if the research is airtight - and I'm not sure a self-reported survey of wealth and spending that was last performed in 2016 is ("we used data from the 1925 economic wellbeing survey to prove a point in 1932!") - if there is a overpowering feeling of malaise and precariousness among the voting public, politicians would do well to heed it, regardless of whether people come off as spoiled or unable to position themselves objectively against the wellbeing of previous generations.