25/07/2017Why it’s Difficult to Land a Job and How This Affects Personal Debt
We have arguably never lived in a more competitive society when it comes to landing well-paying jobs. Nor has the amount of education and experience required for some of these jobs ever been so demanding. A major component of this phenomenon is constant technological improvements and the rise of the tech sector generally.
Improving Technology = Elimination of Jobs
A focus on technological improvement means that many jobs formerly requiring human bodies and brains can now be performed by computers, robots and advanced machinery. A top executive at one of the world’s most prominent management consulting firms has even suggested that 40 percent of current jobs in Canada could be lost to automation resulting from technological innovation.
A report from Ryerson’s Brookfield Institute for Innovation + Entrepreneurship has identified 5 positions that are particularly at risk due to automation:
• Retail salesperson.
• Administrative assistant
• Food counter attendant
• Transport truck driver.
You have certainly heard of the rapid advancements being made in the self-driving vehicle industry, and if you have been to a McDonald’s recently, you may have noticed the increasing presence of self-order computer stations. When it comes to retail sales, many “brick and mortar” shops are shutting down due to the increased popularity of online shopping, and perhaps in part due to a population with less spending power.
One thing to note about these high-risk industries is that many of these jobs (particularly retail salespersons and cashiers) are held by young people on a part-time basis. Many young people rely on part-time work during high school, summers, and during university to help them pay for school. Recent studies have suggested that unemployment in the 16-24 age range is noticeably increasing.
As such, young people are now struggling to nip their debts in the bud due to having a harder time finding part-time employment — debts that will be higher than ever before due to the expectation of more education and more expensive education.
More Expensive Education, and More of It
Scoring high-paying secure jobs tends to require more education in today’s world. Having a bachelor degree in general arts or science, and even engineering, is hardly a guarantee for a well-paying job when you graduate. Many people who complete a bachelor’s program subsequently complete an industry-specific college program or Master’s degree to be more competitive in the job market.
Even when graduates find employment in a field relevant to their education, the vast pool of available candidates and low supply of jobs means that companies can pay far less than they used to. Candidates will take low pay, and at times, even no pay, to get the experience they need to advance in each field. Wages do not appear to be increasing with the cost of living.
Education has become phenomenally more expensive over the years. Tuition at some law schools in Canada, for example, has begun to resemble tuition rates in top U.S. schools. A single year of tuition at University of Toronto’s three-year Juris Doctor program, for example, is now close to $35,000. Over three years, this is more than $100,000 in tuition alone, let alone living expenses and pre-existing debts from undergraduate education. While most students will work to some extent over the course of university, it is not unusual for a Canadian law graduate to finish school, at an age likely no younger than 25 or 26, with a six-figure debt.
More Years of Education = Lost Opportunity Earn and Save
Not only are many graduates starting out in very low-paying jobs, they have spent more years of their life educating themselves. School is demanding, and as such, most students work part-time or not at all, forgoing wages that could have been accumulated, saved, or invested in those years. Debts are higher due to more and more years of education, so people are graduating at older ages with both more debt, and less opportunity to have earned an income.
Unfortunately, human biology has not changed with social trends in education and wage rates. Despite graduating later and with more debt, people still want to get moving on starting their families. Women have concerns about waiting too long to have children, due to biological risk factors. So, entry-level professionals with high student debt loads are also trying to get married and have children, which obviously comes with significant expense.
The Result: More Student Debt, Less Income, and Higher Consumer Debt
What do you get when you combine high levels of student debt, waiting longer to get started on your career, and stagnating entry-level wages? Significant difficulty budgeting and affording what seem to be normal life expenses.
Of course, after years of hard work in school and long hours at work trying to prove one’s self and succeed, everyone feels that they deserve a break. We all need vacation. If we are spending hours trying to prove ourselves at work, we feel that we should be able to live in a comfortable and convenient home, not too far from work. If we want to impress our bosses, we should have a professional and expensive-looking work wardrobe. Unfortunately, all these things cost money.
Figuring out how to budget for the things we need versus merely want is no easy task when pressured by low wages, high costs of living, and student debts. It can be easy to rely on credit cards to afford occasional treats and mini-vacations. Unfortunately, doing this for too long can become more of a burden than you imagined. You may find that your credit card minimum payments are that new monthly expense that you cannot afford.
Speak to a Licensed Insolvency Trustee at Harris & Partners Inc.
Seek professional help if you are in a position where you face danger signs, do not know how to handle your debts, and/or are struggling to figure out what you can budget for and afford in life. At our firm, a licensed insolvency trustee (formally known as a trustee in bankruptcy) can provide guidance on how to move forward. Filing for bankruptcy may not be your only option. Call us at 1-800-268-8093 if you are ready to face your financial situation head-on. We have many locations in Ontario, including Toronto, Markham, and St. Catharines.