Although Canadians may disagree about a lot of things, most share a common aspiration to look after aging family members and give a good start to younger ones.
That's why growing numbers from all walks of life have been inspired to join the Generation Squeeze campaign. They are chatting, texting, facebooking, tweeting, emailing, gathering, partying and petitioning in common cause to give all generations a chance. They do so out of concern that governments pit the health of grandparents against the well-being of their kids and grandchildren when governments budget around $45,000 annually per retiree, compared to just $12,000 per person under the age of 45.
The Generation Squeeze campaign's goal is simple - to shine a light on the spending imbalance between younger Canadians and retirees so it becomes part of the campaign conversation in advance of the B.C. election on May 14. We pursue this goal because spending on younger generations - whether for family, housing, education, environmental conservation, etc.
- will be in short supply until political parties acknowledge the large spending gap between generations.
Although the spending gap is large, the problem isn't spending on seniors. Twenty-nine per cent of Canadian seniors were poor in 1976. But because we now allocate $45,000 per retiree, primarily to their medical care and retirement income security, we've reduced poverty among seniors to around five per cent - lower than any other age group today.
This policy success for seniors is personal to me. My grandmother is 97 and in hospital as I write this column. She would have been poor almost my entire life had Canadians not invested in medical care and public pensions for her and millions of others.
But my grandmother doesn't want investment in retirees to come at the expense of adapting policy to meet new challenges facing the generations who walk in her footsteps. Young people's wages are down around 18 per cent, despite devoting more time to post-secondary than any previous generation. With lower wages, they must pay housing prices that are 150 per cent higher. This means the typical young person must work 15 years to save a 20 per cent down payment on an average home today. A generation ago, it took only five years. So you can see why younger generations feel squeezed between time and money pressures.
For many, this time and money squeeze happens around the same time they'd like to start their own families. The problem is, they can't work their way out of the squeeze without compromising time at home when their kids are young. But if they take this time, many compromise the financial foundation they've patched together by devoting more time to the labour market.
Fortunately, there are solutions. The Generation Squeeze campaign pinpoints three policies to reduce the squeeze for those who someday want, or already have, young children:
First, make it affordable for parents to spend 18 months at home with a newborn. Many today don't even have 12 months, whereas a generation ago it was common for a parent to stay home several years.
Second, build $10 per day child care. Today, the cost is often more than university tuition, whereas the majority of families didn't incur these costs a generation ago when it was more affordable for a parent to stay home until kids started school and there was less concern about gender inequality.
These two policies would save the typical family about $50,000 during their children's first five years and support a third change, making 70 hour work weeks - down from 80 - affordable.
Lone parents could do better than they do now with just one earner. A generation ago it was common to get by with one parent working 40 hours.
By saving about $50,000, young families could pay off an average student debt and reduce the time it takes to save a 20 per cent down payment on a home in an average school district by four years. Or they could pay down the mortgage faster or invest it as savings that would be worth $141,000 by the time Gen Squeeze retires.
These three policy changes are a pragmatic solution to the lower wages, student debt and higher housing prices with which younger generations now struggle. Their cost only requires narrowing the generational spending gap slightly. We'd need to raise government spending per Canadian under age 45 from $12,000 to around $13,000, while keeping spending around $45,000 per retiree.
This small change can make a big difference for Generation Squeeze, while safeguarding medical care and old age security for our aging loved ones. It's a vision inspiring many to amplify their voice in support of a better generational deal.
Paul Kershaw is a policy professor at UBC and can be reached at gensqueeze. ca. This is one of a series of his columns running in The Record.
