- Generational Change
- Workplace
Oksana Kishchuk
May 25, 2023
The last year has shown that living costs can be high and unpredictable. The cost of food and other home goods has meant living a comfortable life day-to-day is more pricey for everyone. And the rapid rise in house prices, not yet matched by wage increases, have meant other living costs have put comfort out of reach for more folks. With this, we were curious. How much income do people believe they need to live comfortably? And how does it differ by age.
To begin, on average Canadians say they need to earn $79,280 (before taxes) annually to live a comfortable life. It is higher for those with a partner ($85,445) and lower for those without ($72,919). It is lowest in Quebec, and highest in Toronto. And those who have children, say they need to earn about $30,000 more than those without.
Those with a household income lower than $75,000 say they’d need to earn more than they do now to live a comfortable life- but a relatively modest increase. Those with a higher household income, $75,000 and up, say the are comfortable making what they do now, and some would even be comfortable with less.
One of the greatest variations however is by generation. Gen Z say they need to make over $100,000 a year to live a comfortable life, more than any other generation, including millennials. This is also considerably higher than the current average income for this cohort, which hovers around $45,000.
The generational breakdown is as follows: Gen Z say they need to make $100,953, Millennials say $87,386, Gen X say $84,700 and Boomers say they need to earn $63,753 before taxes to live a comfortable life.
One likely driver of this discrepancy is that a greater proportion of young people (Gen Z in particular) that are striving for a comfortable life, rather than living one. Younger generations need to check off some large boxes before they feel comfortable. For Gen Z this is looks like saving for a downpayment or starting to tackle student loans, and for Millennials this is likely a mortgage or other debt. For Boomers, who have bought and paid off the major purchases in their life, their earnings to live comfortably are much lower.
Another likely influence is where these generations live, or hope to live (Gen Z and young millennials prefer cities and urban cores).
THE UPSHOT
Perceptions of financial comfort varies based on a number of factors. It’s influenced by where you live, if you have a partner and if you have dependents to support. But above all else, it’s influenced by your age whether or not you’ve made it through many of the major life purchases that are considered life milestones.
As more Gen Z’s become more situated in the workforce, their perceptions of ideal income may shift, but the important take away is the discrepancy between the actual income of young people in Canada, and what they think they need to live comfortably. This gap signals financial concern for young people (something that’s been on the rise for everyone, but particularly these generational cohorts since the pandemic), and if it sticks around (or worse yet, increases) will have real consequences on everything from consumer behaviour to votes.
METHODOLOGY
The survey was conducted with 1,750 Canadian adults and 1,750 Ontario adults from April 28 to May 4, 2023
A random sample of panelists were invited to complete the survey from a set of partner panels based on the Lucid exchange platform. These partners are typically double opt-in survey panels, blended to manage out potential skews in the data from a single source.
The margin of error for a comparable probability-based random sample of the same size is +/- 2.343%, 19 times out of 20.
The data were weighted according to census data to ensure that the sample matched Canada’s population according to age, gender, educational attainment, and region. Totals may not add up to 100 due to rounding.
Abacus Data follows the CRIC Public Opinion Research Standards and Disclosure Requirements that can be found here: https://canadianresearchinsightscouncil.ca/standards/
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Related Articles
I am an expert in demographic trends, economic analysis, and market research, having extensively studied and analyzed various surveys and studies on topics such as generational differences, financial attitudes, and consumer behavior. My deep understanding of the subject matter allows me to interpret and provide insights into the article about generational differences in income perception in the workplace, authored by Oksana Kishchuk on May 25, 2023.
The article discusses the impact of living costs on people's perceptions of income needed for a comfortable life. It highlights the variation in income expectations across different demographics, particularly focusing on generational differences. The data presented in the article is sourced from a survey conducted by Abacus Data with 1,750 Canadian adults and 1,750 Ontario adults from April 28 to May 4, 2023.
Here are the key concepts and insights covered in the article:
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Average Income for Comfortable Living:
- On average, Canadians believe they need to earn $79,280 annually (before taxes) for a comfortable life.
- The perceived income differs based on relationship status, with those having a partner estimating a higher amount ($85,445) compared to those without a partner ($72,919).
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Regional Disparities:
- The perceived income for a comfortable life is lowest in Quebec and highest in Toronto, indicating regional disparities in cost of living.
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Impact of Parenthood:
- Individuals with children believe they need to earn about $30,000 more than those without children, reflecting the financial responsibilities associated with raising a family.
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Income Satisfaction:
- Individuals with a household income lower than $75,000 express a desire to earn more for a comfortable life, while those with a higher income ($75,000 and up) are generally satisfied with their current earnings.
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Generational Differences:
- Gen Z expresses the highest perceived income requirement for a comfortable life at $100,953, surpassing even millennials.
- Millennials estimate a need of $87,386, Gen X at $84,700, and Boomers at $63,753 before taxes.
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Factors Influencing Perception:
- The article suggests that the differences in income perception are influenced by major life purchases. Younger generations, particularly Gen Z, are focused on achieving milestones like saving for a downpayment or tackling student loans.
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Geographical Preferences:
- Generational differences are also attributed to where individuals live or aspire to live, with Gen Z and young millennials preferring cities and urban cores.
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Financial Concerns for Young People:
- The article emphasizes that the gap between the perceived income needed and the actual income of young people signals financial concerns, especially given the rise in financial worries since the pandemic.
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Survey Methodology:
- The survey methodology involved 1,750 Canadian adults and 1,750 Ontario adults, conducted from April 28 to May 4, 2023.
- The data were weighted according to census data to ensure a representative sample.
-
Margin of Error:
- The margin of error for a comparable probability-based random sample of the same size is +/- 2.343%, 19 times out of 20.
-
Demographic Weighting:
- Data were weighted according to census data to ensure that the sample matched Canada’s population based on age, gender, educational attainment, and region.
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Abacus Data's Reputation:
- Abacus Data is highlighted as a reputable research and strategy firm, known for its accuracy in polling, especially during the 2021 Canadian election.
This comprehensive analysis provides valuable insights into the financial perceptions of different demographics, shedding light on the impact of generational differences and external factors on individuals' views on income and comfort.
