If you paid attention to the year’s hottest budgetary event last fall, you might think we’re living in a futuristic hellscape. The internal conservative government report issued by Employment and Social Development Canada stated that the median income has stagnated between 1993 and 2007, and declared the Canadian dream “a myth more than a reality.” So, I guess I can’t make a living playing hockey and chugging maple syrup after all.
In April, Finance Canada issued a rebuttal where the new minister Joe Oliver that says we should all go for a celebratory swim in our pools of cash. Or, more accurately, that the middle class has grown steadily since 1976. Both reports used the same data, yet arrived at vastly different conclusions. Perhaps to be frugal and environmentally conscious, Finance Canada used the same graphs as Employment and Social Development Canada; they just flipped them around.
So, with two drastically different results, how do we decide which is right? Last fall’s report stated that income for middle-class Canadians has seen little increase from 1993 to 2007, even before the economic downturn of 2007-2008. The report didn’t agree with the February 2014 budget, which stated the need for job growth without mentioning the poor situation of the middle class. The study is of even less significance considering Canada’s middle class is now likely the world’s wealthiest. Yet the report from Finance Canada, proving to be the trendier financial institute, used data from before 2011 and showed that middle class income has been steadily increasing since 1976.
The new report may contain fewer butterflies and rainbows, but it likely packs more reality. It notes that the modest growth of the middle class was largely due to women entering the workforce. This does put a cap on income growth because you can’t have more women in the workforce than are currently in existence, for obvious reasons. Whereas previous generations were able to achieve the same level of comfort with only one household earner, the middle class today needs two sources of income to achieve a middle class lifestyle.
The truth about the success of Canada’s middle class is probably found somewhere in the middle of these two reports. Although Canada’s middle class is now the wealthiest in the world, to call it the “least poor middle class in the world” may be a more accurate term. We’re not doing well; we’re just not doing as badly as everyone else. If there was a grading curve for middle class economies we’d be the kid who got a C but was upgraded to an A because everyone else failed. Now we have to go home and explain to our parents that, yeah, we’re dumb, but we’re still the smartest dumb kid.