Crippling debt to buy credentials no one wants. Low-paying, short-term jobs that put middle-class prosperity out of reach. And, for good measure, the prospect of a penurious retirement.

That's the deal on offer to many twentysomething Canadians today, a tectonic shift that could leave a permanent gouge in the national economy.

While young people have always struggled to get established, economists and labour experts say this time is different. Those in their 20s today are facing far more hurdles than their parents' generation, and those difficulties are likely to linger, with profound economic consequences for Canada. There is diminished job security, the growth of temp work, rising costs for food, tuition and housing and record debt levels. To top it off, young people entering the work force today are far less likely to retire with a company pension than their parents' generation.

Story continues below advertisement

"When you put it all together, there is justification for alarm bells," says Judith Maxwell, past chair of the Economic Council of Canada and contributor to a national study released this month called #GenerationFlux.

"People over their forties in Canada have no idea what it's like for a young person trying to find a pathway to adulthood right now."

The tentacles of this new economic reality could stretch over decades. A generation of highly educated people that Canada desperately needs to drive future growth isn't reaching its full potential. High debt and a late start in the job marker means longer delays in buying houses, cars and appliances – which will have a broad impact on Canada's growth rates and prosperity.

Justin MacGillivray is squarely confronting all those headwinds. Two summers in a row of weak job markets have unravelled his plans.

The 22-year-old is finishing his degree in finance at Acadia University in Wolfville, N.S. He sent out about 150 job applications this past summer, but never landed full-time work. Instead, he did a few short-term stints at a restaurant. He is so discouraged that he has tossed out old expectations, and is now considering farming. "I have very little hope in finding pretty much anything right now," he says. At 22, there is still lots of time left for him to find more secure work in his field. But across his generation, the outlook is not rosy.

Charlotte Yates believes it is "a lie" to argue young people will eventually face a dramatic upward shift in fortunes as the economy improves and baby boomers retire. The dean of social sciences at McMaster University in Hamilton says changes in Canada's labour market are permanent – most notably a penchant for part-time and contract hiring – and are not a temporary blip.

"The arguments that say there's a natural progression and they will eventually progress, I think misstate what's going on in the labour market and misstate the long-term consequences," she says.

Story continues below advertisement

"That's why I think it's necessary to start re-framing the debate around how important good jobs are. They're critical for us to maintain the standard of society we have – our standard of living and of course our middle class."

If there isn't a broad debate about the consequences, she fears Canada will look far different in 40 years, with a lower level of home ownership, lower savings rates and higher rates of debt, as workers increasingly go throughout their careers without secure jobs and workplace benefits.

A WORLD OF STAGNANT INCOMES

The notion that each generation will enjoy a better standard of living than the last has persisted since the industrial revolution. It hasn't always happened. But the dream was there.

Talk to many people on the cusp of their careers today, however, and they worry that their generation will be the first in decades to see a lower standard of living than their parents.

Patrick Imbeau is tired of the common complaint that his generation is a bunch of spoiled whiners. He held down three jobs while working on his PhD, and the debt still piled up after tuition prices doubled during the time he was at school. "It's not that I expect everything to be given to me, but I do expect to have some chance to be able to have the same life that my parents had."

Story continues below advertisement

The 29-year-old, who gave up his plans to become a professor while part way through his doctorate, has $30,000 in student debt. That means traditional rites of passage into adulthood – buying a house, having kids, building a nest egg – are all being delayed.

The different playing field for young people today can be measured in a number of ways. One is the decline of secure jobs: The proportion of 20- to 24-year-olds in temporary positions has climbed steadily, to about 29 per cent this year from 21 per cent in 1997, Statistics Canada data show.

Full-time work is harder to find as well. Last month, a broader measure of youth unemployment – which includes not only the jobless, but part-timers who would prefer full-time work and people who've given up looking for work – hit 19.6 per cent, the highest level for any September in 15 years.

Amelia Zheng has felt the sting of underemployment first hand. The 25-year-old has just what Canada needs: fluency in three languages and a masters degree in international business law from the Université de Montréal in 2010, a program she completed under a full scholarship after graduating near the top of her class in Shanghai.

She wants to help forge trade links between Canada and her home country, China. But since graduating, the only work she's found is part-time or short-term contract: as a waitress, a tour guide, teaching Mandarin and in international purchasing.

The change in economic fortunes for the twentysomething generation is especially stark when rising house prices are considered, says University of British Columbia professor Paul Kershaw, who specializes in family policy. His research shows that the average household income of a young Canadian couple has climbed 5 per cent since 1976 when adjusted for inflation, while housing prices have climbed 76 per cent.

Story continues below advertisement

If high debt and underemployment persists, the spinoff impacts could stretch throughout the economy, and could particularly hit consumer spending, depressing demand for cars and other major consumer goods. One-sixth of Canadian spending on consumer goods is tied is to home ownership – purchases such as appliances and lawn mowers.

"We're still a consumer society – we're still driven in part by peoples' capacity to consume," Prof. Yates says. "And if we reduce peoples' capacity, that will have long-term implications."

Experts are quick to point out that the impact on today's generation will be uneven; some people will always do well. But in the future, outcomes will be even more splintered between those with higher education and skills and those with lesser education and skills ill-suited for the labour market, says Craig Alexander, chief economist at Toronto-Dominion Bank.

He sketches out a future scenario where post-secondary education becomes even more more vital. More people go to school for longer, which means they carry more debt upon graduation. And as a result this generation will instead have less time to save for retirement. And what awaits them in retirement is far less appealing than it was for their parents.

"I doubt I will ever get a pension, ever," says Edmonton resident Alix Kemp, 25. She graduated in 2010 with a history degree, and now works as an assistant editor at a magazine. She earns less than $40,000, and is still paying down $8,000 in student debt.

"When I look at the older generation who actually have pensions that I will never get, and who are horrified that they might actually have to wait an extra two years until they retire, I'm like, 'Who's entitled now?' "

Story continues below advertisement

Her hunch about ebbing access to pension plans is right. One of the biggest shifts over the past decade is in the proportion of companies that have closed their traditional defined benefit (DB) pension plans to new employees, who are shunted into group RRSPs or defined contribution (DC) plans. Unlike a traditional DB plans, the DC plans don't pay a guaranteed level of income in retirement. The difference between the two is staggering.

A private sector employee who starts work today at age 25 with a salary of $40,000 will see her DC pension plan grow (assuming steady compound interest and investment returns) to about half a million dollars in value by age 65, an analysis by Mercer shows.

By contrast, a typical DB plan member with the same work history over the same period will have earned a pension with a value of about $1-million under the same circumstances.

The DC conversion trend isn't new, but it means an even greater proportion of the population will have a less-valuable DC pension plan, or more likely no pension at all. That means lower savings early in life because DB pension contributions are a form of forced savings. It takes enormous discipline to voluntarily save as much.

"As a society, I think people are going to lose that period of saving early in their career," says Mazen Shakeel, senior retirement consultant at Hewitt Associates. "And what does that translate into for them? It probably means they work longer. They're not retiring at 55 certainly, maybe not even at 65, because they won't be able to afford to."

Young people are not the only ones bearing the burden, says Ian Markham, Canadian retirement innovation leader at Watson Wyatt. Their parents – his generation – are increasingly subsidizing them, keeping their children at home far longer and helping them more with tuition and housing costs.

Story continues below advertisement

In fact, his own children, all in their twenties, still live at home, and so do many of their friends. The additional costs are causing some parents to work longer to help support their adult children.

"It causes all sorts of other issues by the boomers continuing to work. The next generation down can't fill the more senior positions yet because there's a boomer sitting in the way, so you get productivity potentially lowering for the next generation down."

The education vacuum

For now, the obstacles confronting the young have garnered little urgent attention from governments. They should, Ms. Maxwell says. "It would be very helpful if we had more national recognition that there are many people whose future is in jeopardy. And we can't afford that in a country with a small population. We need everything these young people can offer."

Governments should boost incentives to employers that hire young people and train them, says Nancy Schaefer, president of Youth Employment Services in Toronto.

But the onus should rest on young people, too – some of whom have unrealistic expectations of earning $60,000 right out of university, she says. They should start working early in life to gain skills, contacts and experience. They should seek out employers to ask them what skills they're looking for.

Now, "there's a disconnect between what young people want and need, and what is available out there."

Canada would also do well to study systems in Germany and Switzerland, which have strong co-op and apprenticeship programs, and whose universities work more closely with employers. And employers in Canada, many of whom complain about skills shortages, should beef up on-the-job training – an area in which this country lags.

Parents, teachers and guidance counsellors should place much value on skilled trades as a secure, well-paying career option, Ms. Maxwell says.

Hartley Miller, 25, who majored in political science at the University of Guelph, wishes she'd got better advice in school about the opportunities out there – particularly in skilled trades. "I chose something I liked, but it wasn't the most intelligent for job prospects," says Ms. Miller, who works as a receptionist.

But a big rethink can still spark big opportunities. Stephanie Wilson, 25, had hoped to be a lawyer or veterinarian one day. She stumbled into engineering when a UBC program opened up in her hometown in the Okanagan area of British Columbia.

She was one of few females to graduate in mechanical engineering in May, 2010. She landed a job at engineering firm Hatch Ltd. in the very same month. It wasn't the career path she'd dreamed of as a girl, but she loves it.

"I love the diversity. No day is the same as the day before. And there's really opportunities to go everywhere."

Editor's note: Acadia University is in Wolfville, N.S., not Halifax. Incorrect information appeared in an earlier online version of this story.