The income gap between younger and older workers has grown “significantly” over the past 30 years, according to a Conference Board of Canada report released September 29.
Canadians aged 50-54 years old now have disposable incomes 64% higher than the average disposable income of 25-29 year olds. That compares to 1984, when older Canadians made 47% more than younger workers.
In contrast, the income gap between men and women has decreased across the same time period as women enter the workforce in greater numbers. For the same reason, the income of couples has been rising faster than that of an average young person who is not part of a couple, because couples are more likely to be made up of two income earners.
But both single young Canadians and those who are couples are making significantly less than older Canadians. While older workers have always made more than younger workers, the growing discrepancy could dampen economic growth in the future, according to the report.
An expected future labour shortage as baby boomers leave the workforce may push wages higher for younger workers. However, if the gap continues to widen the trend could have implications for social stability.
“The Canadian generation at the top of the income heap today fought long and hard for principles like equal pay for work of equal value, yet some major employers now offer lower wages and reduced pension benefits for new hires, even for the same work,” states the report.
“Employers persistently complain about shortages of skilled labour, yet many highly educated young people seem stuck in low-skill and precarious jobs.”
@jenstden
