Why I'm happy making $36,000 (for now) - Macleans.ca
 

Why I’m happy making $36,000 (for now)

Inflated expectations, not paycheques, are the problem


 

Josh Dehaas (contemplating his salary while reading something silly in the newspaper).

Twitter lit up today with graduates complaining of their dashed dreams of high-paying jobs. The conversation grew out of a letter The Globe and Mail published this week from a 29-year-old graduate who feels cheated out of the life he had planned for after university. Here’s the nut of it:

“I wanted the tailored suits, the chance at a high income, the BMW, the prestige, the respect, and the power. I wanted to be someone. I wanted to be able to afford to donate to charities that are important to me. I was considering children, marriage, the house, all of it. It’s not happening.”

Instead, this anonymous writer is resolved to making a disappointing $36,000. The Twitterverse quickly concurred—$36,000 is not enough to live on. Employers should pay us more.

After that, National Post columnist Matt Gurney, who is in late twenties himself, pissed off quite a number of the woeful Generation-Y Tweeters by arguing that $36,000 is actually pretty good.

I am a 27-year-old, I finished university in 2010 with $40,000 in debt, and I make almost exactly $36,000 per year now. So I feel I too must warn you, dear students: don’t expect too much.

Like most people my age, I expected to earn north of $60,000 within a couple years of graduation, which for me was with a master’s in journalism from the University of British Columbia.

After several internships (two unpaid and three underpaid), I was reminded of my first-year economics class, where I learned that prices are dictated by the law of supply and demand.

In the field of journalism, like so many fields these days, there are suddenly many more qualified people applying for far fewer full-time jobs. The price of my labour has therefore declined.

But here’s where I differ from the letter writer and Twitterverse. I see $36k as enough—for now.

Here’s how my $2,800 monthly budget breaks down. My shared accommodation is $600, student loans eat another $600, those goshdarn taxes (the same type that funded much of my education) are $900, my phone bill is $55, my gym membership is $45. That leaves $600 for everything else.

It means minor sacrifices. I walk nearly everywhere. I eat bagels and soup from No Frills.

It means some more serious sacrifices too. I don’t save a cent for retirement, or home ownership (much like that woeful letter writer in the Globe). Both seem unattainable—at least for now.

And yet life is pretty good! I went to Iceland, Sweden and Norway last summer. I ate at a fancy restaurant on my birthday. I don’t think twice about buying music on iTunes, tickets to Timber Timbre, The Atlantic on iPad, or beer from the pub. I don’t even carry a credit card balance.

So while $36,000 means the trimmings of adulthood (like RRSPs, a car, home ownership) are temporarily out of reach, I don’t buy the argument that $36,000 isn’t enough on which to live.

Expectations, not paycheques, are the problem, as Gurney points out. He cites a B.C. Securities Commission survey of students that showed they expect to make $90,000 a year by age 29, when in fact Statistics Canada data show the average single person’s after tax income is $25,500.*

I’ve seen similarly dramatic evidence of Gen Y’s unrealistic expectations. Last year, Prof. Sean Lyons and team asked university students what they plan to earn. Female Millenial students (born after 1980) said an average of $67,766 five years after graduation. Men expected $84,868.

Considering female university graduates in their mid-twenties average $36,000 and males average $43,000 a year after grad, they would need annual average pay increases of up to 15 per cent to reach their five-year goal. Annual increases are usually closer to two per cent.

They’re in for an even bigger shock after 10 years. Females expect to take home $100,036; men predict $130,139. Such incomes, as Lyons puts it, “would put them in that top one per cent of earners that the Occupy people hate so much.” By definition, we can’t all be the one per cent.

Should I one day decide I need to be richer—that I must have a house, a car and a retirement plan—I’ll see what jobs might pay me enough to buy those things, and then I’ll weigh my options.

In the meantime, I’ve lowered my expectations—and I find myself quite happy with $36k.

Josh Dehaas is the editor of Maclean’s On Campus. Follow @JoshDehaas and @maconcampus on Twitter.

*This post was updated on May 18 to clarify that the BCSC study was referring to students’ expected earnings at age 29 and the fact that the $25,500 figure is after taxes.


 

Why I’m happy making $36,000 (for now)

  1. 36K a couple of years after graduation is fantastic. When I graduated back in 97, I was offered a job for 21K. I was lucky enough to also be offered a job in the US for 35K. Guess which job I took? After 2 years in the US, I returned to Canada, my salary having increased to 45K. Unfortunately, the pay rates and benefits in Canada fall short of the US, so I had to take a pay cut, down to 38K. Due to layoffs, I’ve had pay cuts since then (as much as 10K),but I’ve always made out all right, travelling south every winter and owning a house that’s now nearly paid for. Today I make 78K (pre-tax). Many of my peers make much more via consulting. I’m happy with what I make, but it took nearly 15 years to get there. Oh, and I’m a computer programmer with a BA and a programming certificate from an IT school.

    So, kids, if you want to make a lot of money, go to the US. But don’t expect the same kinds of salaries here. And learn to live frugally, at least for now. It takes time to get where you want to go. Enjoy the journey!

  2. I really don’t think that $36,000 is “pretty good”, but I agree that it’s not especially hard to live on that amount, even in cities like Toronto, so long as you have no expectations of savings, investments, dependents, etc. But how long is this going to be reasonable? At a certain point there is an opportunity cost by lacking that extra income for savings, home ownership, and the like – is $36,000 still “pretty good” for someone who’s 37?

  3. What a great article. You have realistic expectations and therefore you will not be disappointed.

  4. This article is horrible. You’re telling people that you can be happy living on $36,000/year as long as you don’t own a home, have a family and live in a shared apartment.

    Everything you described such as buying beer, going on vacations, buying music on itunes do not make up a life.

    I agree peoples expectations may be too high when it comes to living a lifestyle of luxury, but since when does afford to have a family and own a home fall into the category of luxury?

    • “for now”? at what point is it no longer ok to be making $36,000? when you want to move out of your shared apartment? i’m 33 and can’t imagine saving for a down payment for my own place until my student loans are paid off in five years. so maybe by 43 i will leave my roommate for a starter home. and maybe by 53 i can start thinking about saving for retirement. i disagree with commenter mike who says that vacations and beer do not add up to a life. they make a fine life when you’re 27, especially if you’re single and have no kids. but when you are ready to start a family, what will you sacrifice?

    • If you can’t afford to have a family then don’t have one! I am quite astounded at all the people who think it is their “right” to have children. Having children is not a right. It is a responsibility. Too many people have children when they can’t afford to properly care for them.

      I do consider having children to be a luxury. It is also a selfish decision, since there are already too many people living on this planet. There are also plenty of children out there in need of loving homes.

      Owning a home is considered a luxury in many parts of the world. Especially the huge single family homes that seem to be the norm here in Canada. If people would be content with a smaller home, or with owning an apartment, then they would be able to afford one, especially since mortgage payments on such small properties, in some parts of Canada, are lower than the rent on a similar sized unit!

  5. When I came out of school in /79 we were just glad to get a job. It was expected that you put in the time and hone your skills, get experience, the pay would rise with that.
    Our 20’s – 30’s were very lean. Travel was a real luxury to most, retirement savings was never guaranteed, home ownership well maybe!!
    I got my first car at 26, paid $400 bucks for that wreck!! First home at 35 (very small home but all ours), and managing to put away a little every month. Only 4 years ago was the first time I left the country on a real trip. I feel very blessed, and very happy with my life, family and friends.
    In saying all this I wonder if the problem is not with the money, but with the belief that all these things are a personal right…
    I was told by a person of the ripe age of 28 that they would never live in a house like mine, its to old and to small hmmmm….

  6. How cool.

    Your a 27 something, almost gonna be 30 and your living the dream life of a teenager or tween.

    You have money to buy music, beer, clothes, and you go to a fancy concert or two. Wow, sounds like the dream life of a prepubescent tween. I know some teenagers that have more lofty dreams and aspirations than you.

    If everyone was like you and would settle for drinking beer and eating bagels, North America would be a third world country with no innovation.

    I am glad, there are assholes who strive to make $90,000 their first year out of college, or drop out of college because they already are.

    They are the driving force behind our society, not a drain like you and your roomate.

    God damn, you could have not gone to university and you would be making as much money you are now, and would not have been in student debt.

    Maybe you should think about your life and future more, instead of eating bagels and drinking beer.

  7. I’m afraid Josh is missing the forest for the trees. The linked G&M article showcases the modern job search in painstaking detail, and most responses to the article (this blog post being no exception) focus on the author’s opinion of what a good salary is.

    Instead of articles criticizing his dreams in life, why don’t you focus on the realities? Things like youth unemployment, average starting salaries in real (not nominal) terms, income:housing price ratios and other statistics that make up the reality of life as a young adult in this country.