05:48am Saturday 23 September 2017

Raising a family is harder but retiring is easier for Canadians today than in the ‘70s: UBC study

Researchers in UBC’s Human Early Learning Partnership (HELP) have created reports for each province in Canada, comparing the costs of living, household incomes and services available to families today with those during the 1970s.

“What we’re seeing is something I call ‘Generation Squeeze,’” says Paul Kershaw, an associate professor at HELP and lead author of the study. “The generation raising young kids today is squeezed for time at home, squeezed for income because of the high cost of housing, and squeezed for services like child care that would help them balance earning a living with raising a family.”

While Generation Squeeze is struggling to raise young families, Kershaw’s research shows that the generation about to retire is doing better. Compared to retirees in the 1970s, Baby Boomers retiring today have higher incomes along with more wealth because the housing market has nearly doubled over their adult lives.

“The Occupy Wall Street movement and related protests across North America signal a growing concern about inequity between the rich and the rest,” Kershaw explains.  “Our pan-Canadian study shows we can only address these pressures by tackling the inherent intergenerational tension.”

Kershaw and colleague Lynell Anderson found that the average household income for young Canadian couples has flat-lined since the mid-1970s (after adjusting for inflation) even though the share of young women contributing to household incomes today is up 53 per cent. While household incomes have stalled, Generation Squeeze is simultaneously struggling with the costs of living because housing prices increased 76 per cent across the country.

According to Kershaw and Anderson, the time, income and service squeeze doesn’t just hurt young families. The Canadian business community pays more than $4 billion annually because work-life conflict among parents of pre-school children results in higher absenteeism, employee health insurance premiums and recruitment expenses. The squeeze also contributes to rising costs of crime, poverty, education and health care.

The study shows Canada is among the worst industrialized countries when it comes to adapting to the declining standard of living for young families.

“Canada needs a new policy to restore the standard of living for the generation raising young kids,” says Kershaw, who has calculated that the policy changes required would cost $22 billion annually or 2.8 per cent of the growth Canada’s economy has seen since 1976.

Kershaw has proposed policy changes, called the New Deal for Families, that include enabling mothers and fathers to stay at home with newborns until they reach at least 18 months of age, providing child care services that cost no more than $10 per day, and allowing employees and employers to use flex-time to better balance time spent at work with time spent at home.

Six provincial and territorial elections were held this October. Kershaw points out that “not one campaign engaged adequately with how Canada has become a country in which it is far harder to raise a young family.”

Kershaw will be releasing his report in Saskatoon, where a provincial election is underway. “Canadians in Saskatchewan led the development of our country’s greatest social policy achievement – medical care.  We now need citizens to show similar policy leadership if we are to ensure Canada once again works for all generations,” says Kershaw.

Kershaw’s research has been supported by the Healthy Children research team at the Saskatchewan Population Health and Evaluation Research Unit (SPHERU), an interdisciplinary team of population health researchers from the Universities of Saskatchewan and Regina, through their early years network, kidSKAN.

“The early years have such a dramatic impact on the rest of people’s lives,” says Nazeem Muhajarine, who leads the Healthy Children and whose team has been working with Kershaw and his colleagues on the report. “As a society, we can either pay now – by better supporting the generation with young children and giving their kids a better start in life  – or pay much more later by trying to deal with the effects of today’s declining standard of living.”

BACKGROUNDER | Oct. 18, 2011

Highlights by province: Declining standard of living for families

British Columbia: B.C. is the only province in which household income for young couples has fallen since 1976.  While incomes fell, B.C. witnessed the greatest increase in the cost of housing – up 149 per cent.  It is now harder to raise a family on the West Coast than it is anywhere else in the country.

Alberta: Alberta spends less as a share of its economy on child care and kindergarten services than any other province. The reluctance to prioritize spending on these services ignores that young Alberta women adapted to the rising cost of living by increasing their employment by 42 per cent since 1976.

Saskatchewan: Household incomes for those approaching retirement have increased more in Saskatchewan since 1976 than any other province.  While it is easier to retire, Saskatchewan reports the worst service squeeze for the generation raising young kids in the country. There are enough regulated child care and kindergarten spaces for just 21 per cent of children under age six.

Manitoba: Since 1976, household incomes for those about to retire have outpaced gains made by young couples in Manitoba by a rate of three to one.

Ontario: Ontario housing prices increased eight times faster than did household incomes for young couples, even though young women increased their labour force participation by nearly 40 per cent since 1976.  As young families have less time at home because they spend more time working, their additional employment hours still do not keep pace with the cost of housing.

Quebec:  Although Quebec is further ahead with family policy than any other province, even Quebec requires substantial policy change to address the decline in the standard of living for the generation raising young kids.  A New Deal for Families in Quebec would extend the period for which all families receive income support when caring for a newborn, further reduce poverty, and improve the quality of child care services.  In so doing, the New Deal would respond to criticisms that economists and developmental scholars have raised about the Quebec child care plan, including:

  • The system invests too much in child care services for children under age one
  • The system invests too little to ensure that all services are high quality
  • The $7/day fee is insufficient to ensure that a high quality system is sustainable.

New Brunswick: New Brunswick stands out in Canada as the province where housing prices increased the least since 1976 (after adjusting for inflation). Still, even in New Brunswick, average housing prices increased faster than household incomes for young couples (15 per cent compared to 11 per cent) despite the fact that nearly twice as many young women are employed today in New Brunswick compared to a generation ago.  Less time at home is a reality for the generation raising young kids, as is the service squeeze because there are enough child care and kindergarten spaces for just 36 per cent of kids under age six.

Nova Scotia: Incomes for young couples have stalled more in this province than any other jurisdiction in the country, with the exception of B.C. Today, 75 per cent more young women are employed while household incomes have not changed since the 1970s. All the while, housing costs rose 32 per cent in Nova Scotia.

Prince Edward Island: Although housing remains more affordable in PEI than any other province, it still rose 62 per cent since 1976.  Over the same period, household incomes for young couples increased just five per cent, despite a 61 per cent increase in young women’s employment.  Outside of Quebec, PEI has more service capacity per capita than other provinces but there remains a need to shift from unregulated to regulated child care services with a focus on improving quality/

Newfoundland and Labrador: Newfoundland and Labrador report by far the largest increase in household income for young couples – up 19 per cent since 1976.  This gain was powered in large part by the biggest increase in young women’s employment over the period, which grew 112 per cent. As a result, the risks of time poverty grew faster in Newfoundland – a fact exacerbated by housing prices that rose three times more than young families’ incomes.

For more information about Kershaw and his research about a Canada that Works for All Generations, visit: http://blogs.ubc.ca/newdealforfamilies

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