The danger of the fading middle-class dream

The middle-class dream. We believe it’s what you get when you follow the rules and get life right. Doing this, we were told by our parents, our teachers and all those who claimed to know what was good for us, will provide a stable, successful career running through to a comfortable retirement. It would also give us the feature asset of any middle-class dream: owning your own middle-class home. Not just any home. The dream middle-class home standing by itself in a desirable middle-class neighbourhood just like the one we grew up in. Even if we didn’t grow up this way, most of us, including new Canadians, continue to aspire to this dream.

For too many Canadians who followed the rules and got life right, the middle-class dream is dying. How did it all go so wrong?

It started in the 1970s when we doubled down on the dream by showing high school students a chart that said achieving any post-secondary diploma or degree would put them on the fast track to the middle-class dream. But this equation started to unbalance in the ’80s when the recession and globalization shattered middle-class employment in the manufacturing sector.

But even then, Canadians didn’t lose hope. There were many good jobs in the growing service sector and a long wave of economic growth from the late ’80s to the early 2000s kept the middle-class dream alive.

Over the last decade, though, the dream has faded fast. Especially over the last five years. For the first time this century, housing affordability has become the top concern of Canadians. This isn’t the usual plea for more low-income housing for the bottom 10 per cent (although this is needed), it’s a cry for housing from the aspirational middle class struggling with the impossible housing market in fast-growing urban and especially suburban markets across the country.

It is convenient and easy to blame today’s housing crisis and pessimistic mood on the pandemic. This would be wrong. Negative citizen/consumer sentiment and growing concern about access to middle-class housing was ramping up a full year before the pandemic started.

Why do we continue to feel this way? Hasn’t it been getting better? Haven’t vaccines and a full economic rebound put us back on track? Is all this doom and gloom just irrational pessimism? Not from the perspective of the aspirational middle class. They are even more pessimistic now about their future economic prospects than they were during the pandemic.

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Frankly, if it was already bad it’s hard to imagine how their mood will improve as they begin to experience the full impact of the war in Ukraine on their cost of living.

Since June 2020 we have seen a steady and consistent decline in satisfaction with the direction of the country from 53 per cent to 37 per cent. When we ask Canadians to take a look at their hopes for their quality of life over the next 10 years, those who say their life will be better has declined from 50 per cent in 2017 to 37 per cent at the end of 2021. Which means two-thirds of Canadians now feel their quality of life will be the same or worse in the next 10 years.

In boardrooms and the media there will be much debate about inflation, interest rates, supply chains and energy sector transition, but Canadians today are laser-focused on the cost of living (what real people call inflation). One-quarter of Canadians tell us they are completely out of money and unable to pay for the rising cost of household necessities.

Not surprisingly, 42 per cent of those earning less than $40,000 feel this way. But the generational numbers are especially worrying. Thirty percent of Gen Xers and 27 per cent of millennials say they are tapped out compared with 18 per cent of boomers.

These dissatisfied younger and lower-income Canadians supported the Trudeau Liberals and their message of hope in 2015 but by the winter of 2022, they were the group that most supported the trucker protests. Only the baby boomers and high-income earners are feeling economically safe but even they now are beginning to worry about what they may have to sacrifice to get by.

Young, employment-precarious and low-income Canadians need financial relief now, but they are also the most concerned about the future and especially a healthy environment. The result is a see-sawing of government responses mixing short-term offers of cash, tax breaks and rebates that often conflict with long-term policies to clean up the environment, manage inflation and build a stronger economy. Those most resistant to change are older, high-income and pensioned Canadians looking to protect their advantages.

But the current story of despair is not just about economics. We have also started to doubt our social and political systems and each other. Since October 2020, trust in other Canadians to do what is best for the country is down from 72 per cent to 59 per cent; trust in our system of government to do what is right is down from 58 per cent to 44 per cent and the view that our society and system is corrupt has increased from 57 per cent to 65 per cent. All of this has happened during a period of unprecedented government-aided economic growth that has pushed Canada’s jobless rate back to its pre-pandemic lows.

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The news isn’t all bad. Canadians value our diversity. Since October 2020, agreement that having a diverse population is very good for the country held firm from 80 per cent to 82 per cent, as has the view that we are all being treated fairly as Canadians.

There is much talk of a great resignation and the power shift to employees as they take advantage of a hot job market, but it may be more about being fed up or the loss of hope than it is about seeking greener pastures. Why work so hard if we can never hope to have the home or life that doing everything right is supposed to entitle us to?

Languishing is turning into despair as Canadians, especially younger Canadians, come to the realization that their dreams are out of reach. These feelings won’t stay bottled up for long. We are seeing an increase in social activism with Canadians saying they are more likely to boycott and protest those organizations that don’t share their values or aren’t contributing to a better world. In this environment, Canada’s public and private sector leaders could be in for a very bumpy ride.

Darrell Bricker is CEO of Ipsos Public Affairs and the author of ‘NEXT: Where to Live, What to Buy, and Who Will Lead Canada’s Future’ (Harper Collins, 2020). Mike Colledge is president of Ipsos Public Affairs.