How much do we know about Millennials? The group born between 1981 and 2001 now comprises 30% of the country's population according to Statistics Canada and will make up about 75% of the labour force in 15 years.
Of course, there are more obvious things such as widespread digital and social media adoption. In fact, a study from Android app firm Locket found that Millennials check their phone 110 times a day on the average. If that seems extraordinarily high, activating the screen by pressing the home/power button or unlocking the device was counted in the usage survey.
But what may be less obvious is that Millennials, are serious about saving for retirement. A CIBC survey found 77% of 25 to 34-year-olds have started saving for retirement, and more surprising is that 60% of those 18 to 24 are also on board.
That might not be a surprise for economists at Bank of Montreal, however. BMO's research suggests this younger generation is on firmer financial ground than their parents were in the 1980s. They face a friendlier job market, earn slightly higher incomes and overall are in a better economic position today than their counterparts 30 years ago, notes BMO.
BMO found that in comparison to the Baby Boomers (1946 to 1965), Millennials have a 93% chance of finding a job, compared with 90% of young Canadians job hunting in the mid-1980s.
Additionally, adjusted for inflation the median income of people aged 25 to 34 years was $33,900 in 1984-88 compared to $34,700 in 2011 for the same age group. BMO suggests that Millennials can buy about 2% more goods and services than their parents could in 1984.
Furthermore, median net worth of households headed by someone aged 25 to 34 years was $52,000 in 2012, almost twice the $28,752 figure in 1984. For families headed by someone aged 35 to 44, median net worth was $182,500 in 2012, again about twice as high as in 1984.
But when it comes down to debt and housing costs, BMO's study paints a slightly darker picture for Millennials. For example, in 2012, 84.4% of Canadians aged 25 to 34 years had debts compared to 82% in 1984. This is likely due to higher student tuition costs which have increased three times faster than consumer prices since 1984.
Also, 85.6% of young homeowners held a mortgage in 2012 while 79.2% did in the 1980s.
As you'd expect, housing prices are notably different. The average house price was 10.4 times the median income of young families in 2011, more than double the ratio of 30 years ago, relative to income. Even though double-digit mortgage rates were common in 1984, young homeowners today must pay more to service a mortgage. This is especially evident in the costly Vancouver and Toronto detached housing markets, where Millennials would have to take on larger debts to purchase homes.
