Canada’s middle class richest in world: report
A new analysis from the New York Times published on Tuesday suggests Canada’s middle class has leapfrogged middle-income earners to the south of us and is now the richest mid-level earnings cohort in the world.
“While the wealthiest Americans are outpacing many of their global peers … across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades,” the report from journalists David Leonhardt and Kevin Quealy says.
But at the top of the list sits Canada, according to the Times, where median income for a family of four is more than $75,000 a year after taxes, up more than 20 per cent from the beginning of the last decade.
The median income in the United States meanwhile hasn’t budged over that time—sitting at $75,000 (adjusted for inflation).
More even distribution of the “bounty” of wealth generated by the private sector thanks in part to stronger unions as well as proactive steps from various levels of government were cited as the central reasons for Canada’s fortunes.
Widening income gap a concern
Still, while the Times report doesn’t quote any Canadian source, experts in this country suggest similar forces are in fact working to widen income disparity in Canada.
“Increasingly, whatever wage gains there are have been tilted to a select group of higher-paid sectors, leaving the median worker with leaner improvements,” economists at CIBC said in a March 20 research note.
While average wages improved 2.5 per cent in Canada last year, median wage – or the actual mid-point between the highest and lowest earners – moved up a much more modest 1.0 per cent.
Faster rising wages among big earners skewed the average higher, CIBC experts noted, extending “a pattern going back more than a decade.”
CIBC noted that while disposable income gains have climbed in recent years, they now appear to be headed lower, as well.
“One constant from last year to this one is that household wallets will be improving at what can only be described as a mediocre pace,” they said.
For U.S. middle income earners, another obvious drag has been that country’s housing bust.
While experts say Canada’s own housing boom, now seemingly winding down, doesn’t pose the same risks to the economy, there is continued concern about elevated consumer debt levels — built up over the years among a seemingly prosperous middle class.
The Times report notes, “Middle-class families in other countries are obviously not without worries.”
© 2014 Shaw Media