There is growing concern over income inequality and its generational dimensions. Post‐Fordist and neoliberal restructuring have reshaped urban labour markets, resulting in growing inequalities that disproportionately afflict younger workers. This article empirically analyses the transition as experienced in Montreal and Vancouver, two Canadian cities that have undergone restructuring in different ways. The study of young adults’ changing incomes reveals growing intra‐ and inter‐cohort inequality, and an increasing intergenerational income gap in both cities. Income inequality is greater in Vancouver, with its more pronounced post‐Fordist labour force composition and neoliberalized governance context. Known factors such as occupation and gender affect the earnings structure, but educational attainment has increased the most in terms of its effect on incomes. Inequalities among young adults are expected to magnify in the future due to unevenness in educational attainment. Urban research ought to pay close attention to the role of education in structuring inequalities, and the ways the impact of restructuring is unevenly distributed across generations.