Youthful Cities is excited to release a new “scrollytelling” experience for the Real Affordability Index 2022. Go on the journey so many young people face searching financial security that is often just out of reach.
Young people live in a monthly deficit position in Canadian cities making urban centers unaffordable to the country’s future generations. On average young people are losing $750 per month by living in cities across the country. To break even young people would need to isolate themselves- no entertainment, no transportation, and no dining out. Is this the position we want young people to be in? This young generation includes ages 15-29. They are often thought of in binaries. Young people are either considered change makers who are the only hope for solving the climate crisis, or they are the tik-tok obsessed generation who overspends on oat milk lattes and avocado toast. With 27 cities, 54 measures, and 2414 data points examined in the Real Affordability Index, we can conclude that this generation is currently still working to afford the toast, let alone the avocado.
The problem with this in our eyes is evident. Young people should have equitable access to educational opportunities and upskilling programs, a higher minimum wage, and affordable options for housing, but they don’t. Affordability for young people should also take into account more than the bare minimum necessary to survive but what it would take to thrive. That’s why we made the Real Affordability Index, to be able to really look at what it costs to live work, and play in Canadian cities.
Data for the index was collected and examined through measures to represent the diversity of young people living in our cities. Lenses that the data is examined include gender, career, full-time work/ part-time work, age cohort, and variations in wage. In partnership with RBC Future Launch, the Real Affordability Index shows that the lack of affordability in Canadian Cities for young people will have ripple effects across the country.
“Young peoples’ inability to afford to live in urban areas can have many compounding negative effects including increased mental health concerns as they face fears of missing out on life ahead and attaining their goals and ambitions,” says Mark Beckles, Vice-President, Social Innovation and Impact, RBC.
The mental health effects of the pandemic on young people are widespread. Social isolation left young people feeling alone in a time when meeting new people and having core experiences is meant to shape who you are and provide insight into what you want to do with your life. The findings that point to a lack of affordability suggest that the trend of missing out will only continue for young people as they can’t afford the cost of engaging in the type of activities that previous generations of youth had access to.
“Tamarack has had the opportunity to work closely with Youthful Cities via Communities Building Youth Futures. CBYF is a network of 20 youth-led collaboratives committed to re-imagining how we support young people to thrive. The Real Affordability Index is a critical tool for youth, youth serving organizations, policymakers, and all of us to understand the opportunities to create conditions for youth success,” said Danya Pastuszek, Tamarack’s Co-CEO and Director of Vibrant Communities. “The lack of affordability in Canadian cities for youth underlines the importance of creating system-wide solutions to improving outcomes for young people. I love the Real Affordability Index as a powerful example of a new method of data collection and use – one that puts youth at the center of that collection and sensemaking.”
“Why is it so expensive to just exist?” is a question at the top of the minds of young people living in Canadian cities. With this question bringing more and more financial anxiety to everyday life, it is possible that young Canadians may move out of city centers or Canada altogether causing a potential drain on talent, decreasing the vibrancy of the city, limiting young people’s options and therefore decreasing sense of belonging.
Canada is stunting the growth of the next generation which in turn will stunt Canada’s growth.
What can we do as a nation to better support the future generation in light of this crisis right now?
The findings from the index point to key trends that are affecting affordability for young people in Canadian cities.
“There are a lot of things that take into account when you think about the cost of living,” says a young Toronto-based Pivot member. “You have to think about rent, paying for food, paying for public transport, or if you have a car, paying for that. Insurance rates are high. Public transport costs increase every year. The cost of living increases every year, and then we just do not increase proportionately.” The Real Affordability Index takes into account what it really costs for young people to live in cities across Canada and paints a picture of what happens when income does not increase proportionally with cost of living. The unaffordability for young people to survive and thrive in Canadian cities will have ripple effects across the country. We have to act now to systemically support young people. They are the future of our cities.
Targets to get closer to affordability for youth in the next 3 years given 6.7% inflation:
To learn more about what affordability means for you, you can check out our customizable web app. The web app will give you insight into how your city ranks amongst others in regard to affordability to give you a better understanding of city wide affordability averages for your particular circumstances.
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The Real Affordability Index (RAI) provides insight into how much money Canadian youth can make in a month in 27 Canadian cities when accounting for monthly expenses and income. For the Youthful Cities team to conduct this task, there were two key factors that went into answering that question – cost and income. Once we have both cost and income calculated, we can then create an overall ranking across 27 cities that illustrates which city can provide the best conditions for youth to live, work and play affordably.
By using data from Statistics Canada’s Labour Force Survey (LFS) we were able to calculate average incomes for those aged 15-29, analyze those incomes by Census Metropolitan Areas and apply an average provincial and federal income tax rate to provide an estimate of how much income youth earn within a month. As Statistics Canada provides an hourly wage figure in the LFS, we took the average amount of work hours youth reported and used those numbers to compare Full-Time and Part-Time incomes throughout this report.
· Additional Assumptions: each month has 4.35 work weeks
Census Metropolitan Area income data was used where available from Stats Canada for the index. We believe it gives the most accurate portrayal of income for the city. Where it was not available, provincial income was used. CMA income are higher overall than Provincial income. We are unsure if that is due to the population size of CMA or lower incomes in rural areas of a province. In some cases cities in a province represent a significant portion of the provincial population (eg Halifax is 42% of Nova Scotia population). It is possible incomes in cities using provincial incomes are slightly lower, but until data is available it is not conclusive.
Cities using Provincial data:
On the cost side of the calculation we first needed to outline which cost items we wanted and were able to measure. Using the Consumer Price Index as a reference guide, we opted to include some of the costs associated with any individual, but also to include other cost factors that are important to young people (e.g. events, subscription services, tech purchases etc.). Figure 2 describes some of the general categories and measurements we used. For a full in-depth list of all the measurements collected, please see the codebook for the RAI linked here: RAI Codebook.
With the list in mind, the next step is to determine how often youth purchase each item on a monthly basis. To calculate this, we utilized survey responses to inform the average quantity youth purchased of all relevant items.
When we put all this information together, we’re able to calculate an average surplus/deficit monthly dollar amount by city.