If you’re a smart kid who wants to work hard and do well, one path to success has always been clear. You went to university, then chose a high-status profession and got your ticket punched. Law and medicine were tops. Six-figure incomes, nice houses and private ski clubs were all but guaranteed. If you were less bookish but had good sales skills, you could go into real estate, rack up huge commissions in a booming market and buy yourself a shiny BMW in no time.
Those days are over. The Great Reset has hit the professional classes too. Young professionals are facing a painful double squeeze. The cost of a degree has gone way up, and the economic benefit it confers has gone way down. Think twice before you encourage your daughter to go to law or med school, especially if she’ll have to borrow heavily to do it. On top of that, these young professionals are starting their working lives later than ever before. By the time they are credentialed and hit the work force, they’re in their early 30s.
“There’s a real disconnect between the perception and the reality,” says one senior lawyer. “You have to be pretty creative when you’re thinking of law as a career choice.” Translation: If you think you’re going to land a $100,000 starting job on Bay Street, you’d better have Plan B. It’s more realistic to aim for association or government work – where salaries are a lot lower. (By the way, you’ll have to do your articling in Sudbury.) And even if you start out in the big time, the ladder to partnership is being pulled up. These days, it can take 10 years to become an equity partner in a major firm – if you make it. Most don’t.
Meantime, law-school tuitions have soared (the University of Toronto charges $25,000) and the competition to get in is ferocious. Three years of undergraduate work doesn’t cut it any more. Today, you’d better have an advanced degree (or two) if you want to get into a top school. All this adds up to more time in school and more debt. By the time your daughter is called to the bar, she may have $80,000 or more in debt, with income prospects that are far lower than she expected.
In the United States, where law schools are churning out two graduates for every job, the law-school bubble has become a dramatic bust. The situation is better here, but the big trends are the same. In Ontario, hundreds of articling students can’t find spots. Top earners at top firms are making more than ever, but everybody else is treading water. More and more lawyers are being treated as commodity service providers, and they’re being squeezed for volume discounts. Some are already being forced to compete with legal outsourcing firms (India does it cheaper) and computer technology, which can now perform sophisticated document searches more efficiently than human beings.
You’d think medicine would be better. After all, we can’t outsource brain surgery. And the demand for medicine – unlike the demand for legal services – is booming.
But young doctors face the same squeeze as young lawyers. Like law school, medical school is so competitive that today’s students need advanced training and graduate degrees in order to get in. By the time they qualify as doctors, they’re well into their 30s, with $180,000 in debt. And the expectations of medical students are also disconnected from reality.
The trouble is that doctors have just one big client – government – whose ability and willingness to pay is shrinking fast. The booming consumer demand for medicine doesn’t necessarily translate into jobs. Even though hospitals need extra surgeons, they aren’t hiring them because they can’t afford to expand operating-room time. Of all the general surgeons who finished medical school at the University of Toronto in the past two years, only 15 per cent have found work. The rest are pursuing further training, in hopes that something will eventually open up.
Yet in spite of all this higher training, doctors’ incomes, too, are heading down. Ontario has just announced a freeze on total funding for doctors, which means that new doctors will have to share the pot with existing ones. The Ontario Medical Association figures that over the next four years, the freeze will mean a total pay cut of 16 per cent. Another problem with the job market is that older doctors – like older lawyers – aren’t retiring. Their retirement savings have been hammered. They can’t afford to.
Oh well. There’s always real estate – isn’t there? Don’t count on it. The residential real estate cartel is long overdue for breakup. One of these days, real estate agents will go the way of travel agents and full-service brokers. The only reason they’ve been able to suck such high commissions from the pockets of consumers for so long is their ability to control access to the MLS. That has finally begun to change. Now Power Corp. has bought up a bunch of do-it-yourself real estate services and folded them together into an outfit called ComFree, whose clients can list their houses on MLS. ComFree is barely on the radar screen in most of the country. But it has captured a third of the market in Quebec City.
Old-line real estate agents should enjoy their Beemers while they can. And students who are thinking of becoming doctors or lawyers shouldn’t count on driving one. The professional classes can’t escape the gales of change that are ripping through society. They’ll adapt. But they’ll never be so comfortable again.