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

Inflated expectations, not paycheques, are the problem

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.