Incomes, house prices leave young B.C. families worse off

[Smurf]

Maybe the statement "BC means bring cash rings true". What do people think of this.


http://www.globaltvbc.com/incomes+house ... story.html

Incomes, house prices leave young B.C. families worse off than anywhere in Canada
BY TARA CARMAN, VANCOUVER SUN : Tuesday, October 18, 2011 12:00 AM

Heather Hansen and her husband are left with almost no spending money after they pay their regular bills.

Mortgage payments on their New Westminster townhouse, daycare costs for their two-year-old son, transportation, groceries and servicing student loans suck all the income out of the household as fast as Hansen, a health care social worker, and her husband, an apprentice welder, are able to earn it.

The family is not eligible for any kind of income assistance because their salaries are too high.

"But we continue to [accrue] debt because we actually don't make enough money to live," Hansen, 31, said. "At present, we are barely able to maintain any form of personal or social life because we can barely afford our groceries."

Hansen's experience is not unique. In fact, a new study indicates it is the norm for couples with young children in B.C., whose standard of living has deteriorated more than that of their counterparts in any other part of Canada over the last 35 years.

Since 1976, household incomes for couples aged 25 to 34 in B.C. have dropped by six per cent after adjusting for inflation, said the study by Paul Kershaw of the University of B.C.'s Human Early Learning Partnership.

This is especially significant given that the proportion of young women who contribute to household income increased by 42 per cent over the same time period, while the number of men in the workforce remained relatively constant.

B.C. is the only province in Canada to report a drop in average income for this age group, the study found.

At the same time, housing prices have skyrocketed across Canada, and nowhere more so than in B.C. Real estate prices have risen 149 per cent in this province since 1976, when housing costs accounted for less than three times the average household income for young couples. Today, it is seven times as much.

The bottom line?

"B.C. is now the hardest province in which to raise a family," study author Kershaw said in an interview. "And that's because we're the only jurisdiction in the country where household income for young couples has actually fallen behind where it was a generation ago."

This reality is setting the stage for "a silent generational crisis occurring in homes across Canada," he said.

"While the generation raising young kids are squeezed for time at home and squeezed for money after housing and squeezed for services like health care, for the generation about to retire, it's become far easier," he said. And because they are the demographic that tends to vote in higher numbers, policy priorities typically reflect their interests, Kershaw said, citing the focus on funding health care to treat end-of-life diseases as an example.

Baby boomers are also leaving behind a national public debt that has nearly tripled over their adult lives as well as an environmental debt in the form of per capita carbon dioxide emissions they have made little effort to reduce, Kershaw said. At the same time, they are cashing in on the skyrocketing housing prices as their children struggle to scrape together a down payment, he added.

In fact, Hansen and her husband would not have been able to afford their townhouse without the help of their parents. The previous generation did not necessarily have it any easier, but they were able to find jobs without as much formal education, Hansen said.

"I find that a large number of my peers, anyhow, are entering the workforce after incurring a large amount of debt and are then trying to buy a home with very little equity."

Christina King and her husband Ian are not among them. The couple, who have a 22-month-old son and a two-month-old daughter, recently decided to give up the idea of ever owning property because they are not willing to sacrifice time with their children to make the kind of money a B.C. mortgage demands.

"I'm not interested in working my butt off to pay a mortgage that we really can't afford and then totally lose out on enjoying our children and giving them the benefits of having me at home," she said.

King, 34, teaches yoga, but works around her husband's schedule so one of them is always home with the children. The family rents a house in Metchosin, a bucolic community west of Victoria, from Ian's parents. But Ian will soon be moving into a position as a farm manager in the same community, and a house on the farm will be part of his compensation.

"We've chosen a lifestyle over making a ton of money," King said. "We've chosen that lifestyle because it's something that we love to do, it goes with our values. It keeps us happy and not stressed, which I think makes us better parents.

"We're still able to do what we love, but we're not going to have to pay a mortgage for the rest of our lives."

Sacrificing family time to pay for housing and child care is a decision young parents should not have to make, Kershaw said.

He recommends three policies to help these families afford to spend more time together: Extending parental leave to 18 months from 12, generally reserving the extra six months for fathers (except in the case of same-sex couples or single parents); reducing child care service fees to no more than $10 a day and making it free for families earning less than $40,000 a year; and adapting overtime, EI and CPP premiums paid by employers to make it more expensive to use employees more than 35 hours a week, thus creating flex time and reducing the work week by three to five hours. He puts the cost of implementing these policies at $22 billion, or about $1.67 per adult Canadian per day.

B.C. Children and Family Development Minister Mary McNeil called the proposals "interesting," but said they will require discussions by all levels of government.

"I'm really welcoming this report," McNeil said, adding that the study dovetails well with work the province is already doing with communities to develop regional poverty reduction plans. She said she is eager to sit down with Kershaw to discuss his findings.

"There is a challenge for young families, we recognize it."

[Oxl3y]

In before GF whining about people getting any kind of social assistance.

Anyways this is hardly a shock. With the cost of living here being equal or more than living in Calgary but with jobs that pay $5+ less an hour of course its harder to live in BC.

[Veovis]

So they bought a place that they could barely afford and are mad that their bills are tight?

I think the saying "You made your bed now lie in it applies"

What type of groceries, what type of cars, do they have full satelite packages???? Have they evaluated daycare vs what the lower income maker takes home after tax - perhaps both working means they have LESS money (I've seen it)

What people have for expenses really changes whether they can have money left over or not, and it's easier to say "I WANT MORE" than it is to live within your actual means.

I guess people who aren't always fiscally resposible have a hard time getting my sympathies, often if you doubled their salary, they would still be getting farther in debt.

[Smurf]

When I posted this I certainly wasn't thinking about the couple mentioned as much as I was thinking about things like this.

Hansen's experience is not unique. In fact, a new study indicates it is the norm for couples with young children in B.C., whose standard of living has deteriorated more than that of their counterparts in any other part of Canada over the last 35 years.

Since 1976, household incomes for couples aged 25 to 34 in B.C. have dropped by six per cent after adjusting for inflation, said the study by Paul Kershaw of the University of B.C.'s Human Early Learning Partnership.

This is especially significant given that the proportion of young women who contribute to household income increased by 42 per cent over the same time period, while the number of men in the workforce remained relatively constant.

B.C. is the only province in Canada to report a drop in average income for this age group, the study found.

At the same time, housing prices have skyrocketed across Canada, and nowhere more so than in B.C. Real estate prices have risen 149 per cent in this province since 1976, when housing costs accounted for less than three times the average household income for young couples. Today, it is seven times as much.

The bottom line?


"B.C. is now the hardest province in which to raise a family," study author Kershaw said in an interview. "And that's because we're the only jurisdiction in the country where household income for young couples has actually fallen behind where it was a generation ago."

We can second guess people or question how they might or might not handle their finances all we want but that does not change the fact that this article raises serious questions about families being able to afford to live in BC. I believe we would like to attract young working families to our province and not just high end workers. We also need people to work in retail stores, hotels, convenience stores etc.. These people need to live. I believe we have a problem that is only getting worse as is shown by this article. Do you have any solutions for this or are we going to price ourselves right out of the labour market?

[NAB]

Similar applies to government. It's a vicious cycle this addiction to debt, and no question government is a significant party to what causes the majority of people to end up in such a tight personal situation. For that matter, so is the buisiness / employer community who spend such a significant portion of their revenues pushing people to buy and consume ever more, more, more, through (sometimes very questionable) advertising and marketing techniques, while keeping their employees as close to the lowest possible income line as they can get away with, hence "tied to their job". Joe and Jane (and kids) face a group of very devious and well funded "enemie"s when it comes to trying to "live within their means", and nowhere in Canada is this more obvious than in BC.

Nab

[Rwede]

In before GF whining about people getting any kind of social assistance.

Anyways this is hardly a shock. With the cost of living here being equal or more than living in Calgary but with jobs that pay $5+ less an hour of course its harder to live in BC.

Average weekly earnings:

Alberta $833.40
BC $776.50

Difference $56.90

Hourly difference $1.42

Not quite $5+, but carry on.

[NAB]

Unfortunately, "Averages" as to earnings, particularly gross earnings or anything else for that matter, are usually meaningless for day to day practical comparative purposes.

Nab

[gardengirl]

So they bought a place that they could barely afford and are mad that their bills are tight?

I think the saying "You made your bed now lie in it applies"

What type of groceries, what type of cars, do they have full satelite packages???? Have they evaluated daycare vs what the lower income maker takes home after tax - perhaps both working means they have LESS money (I've seen it)

What people have for expenses really changes whether they can have money left over or not, and it's easier to say "I WANT MORE" than it is to live within your actual means.

I guess people who aren't always fiscally resposible have a hard time getting my sympathies, often if you doubled their salary, they would still be getting farther in debt.

What stood out to me was the comment about having no social life. I wonder how much they need for that....

These people chose to have 2 children in less than 2 years, while the husband is only an apprentice and the wife has a large student loan. It appears they should have spent some time learning about budgetting and making choices which will fit into that budget.

[Rwede]

Unfortunately, "Averages" as to earnings, particularly gross earnings or anything else for that matter, are usually meaningless for day to day practical comparative purposes.

Nab

Always better to grab the extremes, like the NDP does, to make your case. Right.

Good thing for those making less than $83,000 in BC that they pay less income tax than their counterparts in Alberta.

[Bagotricks]

Do people really know "poor" people who are poor because they have 4 TV's a 4000 square foot home and 3 BMW's but cant afford them? Who are these people and who gives them credit?

Every "working poor" family I know are lucky to have a basic home which they are renting at more than half their monthly salary - nobody watches TV or owns one, they drive beater cars and live check to check (like 70% of Canadians) and hit the food bank when a kid needs medication or the beater car needs a water pump.

I think people have watched too much reality TV and skewed actual "reality" here.

I also think its misdirected blowback from the powers that be that want to shift the blame of 25 year static wages, skyrocketing cost of living, tax and user fee increases, benefit reductions and economic inequality back to the victim. I even hear people blaming the victims of these criminal toxic mortgages - "nobody made you sign the papers". What a sham! I suppose female rape victims should learn not to dress so slutty as well.

Its also mixed messages - capitalism needs unfettered constant growth. If you bought one flatscreen TV this year, you need to buy 2 next year. A month after 9/11 - the most powerful man in the world got on TV and begged you to go buy frozen yogurt at the mall. If people stopped buying useless crap they don't need, the economy would tank. So what will it be kiddos?

[Captain Awesome]

If people stopped buying useless crap they don't need, the economy would tank.

Incorrect, but this is not what you want to talk about.

[Bagotricks]

If people stopped buying useless crap they don't need, the economy would tank.

Incorrect, but this is not what you want to talk about.

How is that incorrect?

Why did GW Bush beg people to go back to the malls? Or economy is not consumer driven? Its all about mines, forests and fisheries? The whole technology sector only really works to provide "entertainment" to society now - with military applications ;)

If you say something is incorrect, provide examples Cap'N.

Edit in : the service sector of the Canadian economy makes up 78% of the GDP.

[flamingfingers]

Interesting read from Murray Dobbin:

Is Capitalism Preparing to Bury Itself?

Choke consumers' wages and you choke the economy. Why don't our leaders see that?

By Murray Dobbin, 26 Sep 2011

Where is Henry Ford when you need him?

You may remember Henry -- the ruthless industrialist who nonetheless refused to be hobbled by suicidal ideology when it came to doing business. He realized as his workers cranked thousands of new cars off the assembly line that none of those workers would likely ever own one, because he didn't pay them enough. So he dramatically increased their wages. It was such a good idea that most industrialists followed suit and his practical approach was dubbed Fordism. It was the foundation of a high-wage economy, it lasted a very long time and it produced incredible real wealth for decades.
 


Until something called neoliberalism decided to kill the goose that laid the golden eggs. And the perpetrators of this ideology -- and the catastrophic damage it has done to the global economy, nations, communities and workers -- are so wedded to it that they seem determined to pursue its goals and accept its preposterous assumptions until the ship truly does go down.
 


The new set of goals and assumptions of neoliberalism mandated that workers' wages and salaries had to be constantly driven down in a new global system of competition for high share prices. Not a competition to achieve growing companies, or economic stability, or balanced growth, or even profits, but share prices.


Now, the vast majority of working people in Canada are up to their eyeballs in debt, hundreds of thousands have no jobs, families are hunkering down in survival mode and not buying much of anything beyond food and clothing, and everyone is waiting for the inevitable bursting of the housing bubble -- the only thing keeping the rusting, rudderless hulk afloat. Someone should tell Canada's finance ministers that consumers account for 60 per cent of our GDP. Choke the consumer (by choking her wages) and you choke the economy.
 


How to create a consumer debt crisis
 


Today, the five-thousand-ton chickens are coming home to roost. Chicken number one is already home. Working people, whose real (after inflation) increase in pay between 1980 and 2005 was $51, maintained their middle class lifestyle (and corporate profits) by going into debt. In June, household debt hit a record $1.5 trillion. Averaging it out means a two-child household owes about $176,461, including mortgages.
 


Cheap goods produced by off-shoring manufacturing helped keep the working family afloat, too. But of course the trade-off was the loss of the best private sector jobs in the country. Now Canada boasts the second highest percentage of low paid jobs in the OECD. And with labour costs in China rising, those cheap goods will get more expensive.



Corporate Canada had a lot of help in keeping wages and salaries flat. Starting in earnest with Paul Martin's finance regime, the federal government -- followed by the provinces -- has ruthlessly implemented what it euphemistically calls a "labour flexibility" policy. Vicious cuts to EI eligibility, the slashing of welfare rates, the virtual abandonment of labour standards enforcement -- all in the service of corporations, er, sorry, the economy. Where working people once had an option of quitting a bad employer (one that, say, demands you work overtime for nothing to prove you want the job), that option has now all but disappeared. It's an employer free-for-all in denying workers' rights.
 


Too bad all the geniuses now occupying the dismal science haven't figured out that a cheap labour economy ultimately means a low consumption economy.


[NAB]

Unfortunately, "Averages" as to earnings, particularly gross earnings or anything else for that matter, are usually meaningless for day to day practical comparative purposes.

Nab

Always better to grab the extremes, like the NDP does, to make your case. Right.

Good thing for those making less than $83,000 in BC that they pay less income tax than their counterparts in Alberta.

LOL, and everyone in Alberta pays less in sales taxes and other fees than their counterparts in BC. And gas is cheaper, plus often prices on just about everything are lower. And it will be interesting to see over the next few years just how "average" income tax comparisons end up too. Nothing is ever fixed as a forever and all encompasing truth, particularly when it comes to taxation.

[Captain Awesome]

Why did GW Bush beg people to go back to the malls?

He didn't. George W. Bush asked not to panic or live in fear but to go on living our lives. He said our people will respond to the terrorist attack. He actually didn't mention malls or anything to do with consuming, just said our economy will not stop and keep going. So, I'm not sure where you take that "begging to go back to the malls". It's a bit of a urban myth to be honest - repeated many times over to the point when it became reality for some people like yourself.

http://guynameddave.com/2011/09/the-911 ... ping-myth/

Or economy is not consumer driven?

Well, yes and no. If everybody stops buying stuff tomorrow our economy will crash, indeed. If people stop being irresponsible with money, stop using credit cards, second mortgages, invest the money wisely, and life off investments when retirements comes - economy will only prosper, govt can get out of pension and disability business, or even charity - because wealthy people give like no one else. That's the way things used to be - before easy money started flowing.