There's a good chance Generation Y is familiar with the song "mo' money mo' problems" -- they grew up with the musical stylings of Notorious B.I.G. after all. But a recent study suggests Generation Y-ers are taking those lyrics to heart and spending whatever they can on luxury items.
The American Express Business Insights survey says that those born since 1983 have carried the momentum behind luxury spending, increasing the spending in areas such as fashion by 33 per cent, travel by 74 per cent and fine dining by a 102 per cent.
"What we've seen in Canada is that, even during economic uncertainty, consumers are not shying away from luxury spending,'' said Colin Temple, vice-president and general manager of merchant services at American Express Canada.
The survey uses spending habit data from 2009 to 2011 and says that Canada's luxury market fall was hit less hard by 2009's global recession, dropping 9 per cent, compared to the U.S. and the European markets which fell 14 per cent and 10 per cent respectively.
Both markets have also yet to see sales at the pre-recession level.
When it came to Canadian youth's appetite for online luxury fashion, no generation could compare, jumping to 53 per cent in 2011 from 15 per cent in 2009 when compared year by year, according to the National Post. Meanwhile, Generation X-ers -- those born after the baby boom and up until 1982 -- increased their spending on 32% year-over-year in 2011 from 1% in 2009 in the same category.
Boomers spent more in comparison, with increased spending on luxury fashion rising 45 per cent year-over-year in 2011 compared to 3 per cent in 2009. Seniors also increased their spending by 30% year-over-year in 2011 compared with 4% two years earlier.
The American Express survey doesn't go into detail on how Canada's youth is paying for their life of luxury, but the trend of spending on big ticketed items also coincides with research from the Journal of Consumer Research. The report suggests that despite Canadian's best efforts to budget, the accumulation of big items can still leave their wallets empty.
To keep the issue under control, the authors of report suggest creating a separate category in budgets, that are specifically designed for exceptional purchases. By keeping track of splurges, researchers believe consumers will at the very least, pause to give thought it their next luxury item a necessity, reports to the Globe and Mail.
With files from the Canadian Press
Youth Unemployment In Canada
The red line on this graph from StatsCan plots the unemployment rate for Canadians between 15 and 24 years old. Youth unemployment in Canada this summer is around <a href="http://www.financialpost.com/personal-finance/young-money/joblessness+normal+grads/4929608/story.html" target="_hplink">double the national rate</a>, at 14 per cent.
Youth Unemployment By Region
Barrie has <a href="http://www.theglobeandmail.com/report-on-business/economy/jobs/canadian-youth-unemployment-rates/article2064041/" target="_hplink">one of the highest rates</a> of youth unemployment in the country at 25.4 per cent. Regina is one of the lowest at 9.5 per cent. This chart shows unemployment rates by region from 1996 to 2003.
UK Youth Unemployment Hits Record
By November 2010, youth unemployment rates in the UK had reached 20.3 per cent. It's the highest level of youth unemployment in the UK since they started keeping records in 1992.
EU Youth Unemployment Rates
Youth unemployment in the European Union was just above 20 per cent by the second quarter of 2011. Unemployment in the EU for people between the ages of 15 and 24 peaked at the end of 2009 and beginning of 2010.
U.S. Youth Joblessness Near All-Time Peaks
In July 2010, the rate of youth unemployment in the U.S. reached 19.1 per cent, which was the highest July on record. In contrast, the youth unemployment rate in 2006 was 11.2 per cent, in 2002 it was 12.4 per cent, in 1998 it was 10.8 per cent and in 1994 it was 12.6 per cent.
International Youth Unemployment Rates
Comparatively with other countries, Canada<a href="http://oncampus.macleans.ca/education/2011/06/13/is-canadas-youth-unemployment-really-so-bad/" target="_hplink"> isn't doing the worst</a> when it comes to the youth unemployment rate. 24 per cent of Sweden's youth are unemployed and Italy is at 29 per cent. In Spain, it's a staggering 44 per cent. Germany is only at 8.1 per cent, but students in that country attend university full-time and don't pay tuition.