Students expect “shockingly” unrealistic paycheques

Career expectations differ by generation


Photo by jauhari on Flickr

How much money do university students expect to make once they’re established in their careers?

The answer, revealed in a new study on the differences between generations’ career expectations, is one that Professor Sean Lyons, co-author of the study and University of Guelph business professor, finds “shocking.”

Millenial students, those are born in 1980 or later, expect average first-year salaries of $48,860 for men and $42,060 for women. That’s not much above what current university graduates actually make: $43,119 for men and $35,926 for women.

What’s surprising is that, after five years, Millenial women expect to make an average of $67,766 and Millenial men expect to rake in $84,868. To get there, men would need average annual salary increases of 14.8 per cent and women would need to grow their salaries 12.8 per cent per year. In real life, the average annual salary increase per year in more like three per cent.

But most shocking of all are Millenial students’ anticipated peak salaries. Women believe they will reach $125,664 at the height of their careers. Men believe they’ll max out at $171,036.

If that were true, “it would put them in that top one per cent of earners that the Occupy people hate so much,” says Lyons. It’s not merely that students think they’re exceptional. Millenials believe that six-figure incomes are normal. Female Millenials believe that people of similar education levels average $100,036 annually. Men estimate that those who hold the same degrees make $130,139.

But $100,000+ salaries put Canadians in the top four per cent of income earners in 2010. Very few are making what Millenials think is the normal wage for university graduates.

The study found many surprising differences between generations too. “One of the findings that we found astonishing is that when we look at the number of moves people have made over their careers, there’s an enormous change from one generation to the next,” says Lyons.

People under age 30 today (Millenials) change jobs three times more often than Baby Boomers (those born between 1946 and 1964) changed jobs before they turned 30, he says.

Millenials’ restlessness may partially be explained by differing values, says Lyons. “The older generations say ‘you stay because it’s the right thing to do’,” he explains. “[For Millenials] it’s such a common idea now that you don’t stay put… that to stay put is to stay stagnant,” says Lyons.

Millenials are also more likely than older generations to cite personal considerations for their decisions about whether to stay at a job or reduce their hours. Reasons for leaving include ethical considerations, time off for travel, time with family or more training.

It may seem ironic that students who are about to enter the workforce would have such lofty expectations about their jobs, considering all the buzz about stalled job growth across the Western World. But according to Lyons, Millenial students can’t be blamed for harbouring high expectations. They’ve been repeatedly told that Baby Boomers will retire early and job openings will bloom.

“That’s the story that’s been told all the way through university and college,” says Lyons. “But after the recession hit and peoples’ retirement incomes were affected by it, we’ve seen a prolonged employment period for boomers… and opportunities [for young people] haven’t materialized.”

And that’s a problem. “The concern is that young people aren’t tempering their expectations,” says Lyons “They’re just leaving jobs, rather than saying, ‘I guess my expectations weren’t realistic'”

But Lyons doesn’t blame Millenials. He blames parents, employers and educators who perpetuate the myth of endless opportunities and high salaries.

“I have colleagues who say [to their students], my student graduated into a six-figure job in accounting,” says Lyons. “Well, that’s fine, but most graduate into a $40,000 job,” he says.

“We talk about extremes,” laments Lyons. “What we don’t do is talk about norms.”

Perhaps one reason for students’ confusion is that associate professors averaged $113,148 in 2010—far above the norm.

Pay attention students—the average wage of Canadians aged 25 to 54 in September was $48,458.

The study, Generational Career Shift, is available here. It was conducted by researchers Sean Lyons of Guelph, Linda Schweitzer of Carleton University and Eddy Ng of Dalhousie University using a panel of 3,007 Canadians, including 906 Millenials.


Students expect “shockingly” unrealistic paycheques

  1. Instead of focusing on expectations (which make the millenial generation seem like they’re thriving) we need more studies on what the 20-30 age bracket is actually making on the job. I’d wager that a significant portion of that population is living on $15/hour or less.

    As well, the increasing number of career/job changes can be linked to changing employer values as easily as to changing millenial values. My parent’s generation could work at a job for 20 or 30 years. The current crop of employers seem to have no issue kicking you out on short notice to beef up numbers for the quarterly report. Loyalty to a company just isn’t rewarded in the same way it used to be.

  2. Could students be subconsciously calculating for inflation?

    Based on historical data, 70,000 dollars today at an average of 3.23% (The same rate of inflation over the last 30 years) would be equivalent to about $187,000 in 31 years. Since most people earn a peak income in their late career, it would almost seem sensical for a 25 year-old university graduate to expect to make an above average wage as they approach retirement.

    It would be interesting to recalculate these numbers with inflation.

  3. I will admit that the 5-year outlook is distorted.

  4. Agree with Danielle. I’ve been in jobs where hours have been cut back so much, there’s no way to survive, so there’s been no choice but to go to yet another job (where the same thing ends up happening). And these jobs only paid about 9-12$ an hour which made it hard enough (of course now minimum wage is about $10-something).
    I don’t like being grouped in with these supposed “Millenials” if what is being found is actually being said. I was born in the early 80s and trust me, I do not feel entitled and am just striving to break that $30,000 a year barrier! I also just want a job that CAN last more than a year or two!
    And yes, I do have a degree. Two if that matters (which it doesn’t in this job market).

  5. What’s even more incredible are the high school students, who go into “business” thinking that they will become investment bankers and start earning 6-figure salaries as soon as they graduate from university, just because they’ve been accepted to “Ivey” or “Rotman” or “Shulich”. It’s hard to convince them otherwise, because, naturally, all of the universities’ promotional materials brag about the star students – the one in a million that DO manage to snag high-paying jobs immediately upon graduation.

  6. It would be interesting to do a breakdown of those figures based on which program the students who were surveyed were in.

    If they are working at a degree in Gender studie s, their salary expectations shouldn’t be any higher than what aperson makes for the sort of job that requires you to say, “would you like a biscotti with your grande latte?”

  7. It seems to me that another elephant in the room lies in the discrepancy between salaries paid to different genders. Not only does the article mention that men are paid more ($8000 in the first year of employment alone) but also that such disparity is so expected and engrained that female expectations as to salary are tempered (almost $45,000 or about a 26% difference at the height of their careers). To me this disparity is more interesting than the expectations themselves as expectations are easily corrected while once disparity is ingrained and accepted, it is far more difficult to fight.

  8. What ever happened to “shoot for the stars and you may reach the moon”? I see o problem with high expectations so long as they are willing to work to get there.

  9. It’s not hard at all to earn over $100K during your 30s if you pick the right career.

    A lot of people don’t earn 100K because they favour lifestyle over work. That’s okay too. But, it’s wrong to say that students’ expectations are inflated just because other people aren’t earning 100K.

    Careers like investment banking and medicine yield high salaries but students will probably find that they aren’t too interested with its hours.

    Anyone who’s 100% influenced by money will easily get a 100K by the time they’re 30.

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