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15 April 2011

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Canada’s Shrinking Middle Class

 

Families in Canada are finding it

harder to keep up economically

 

Armine Yalnizyan is an economist with the Canadian Centre for Policy Alternatives.

 

In a speech (March 10, 2009) Ms. Yalnizyan she said: “The middle class is running faster to stay in the same place. And the promise of mobility, that notion that the future will be brighter for our children than for ourselves, appears to be in question.”

 

Working Harder Cuts into Family Life

Ms. Yalnizyan notes that two-income families are now working 200 hours a year more than they were ten years ago. In the 1970s, two-income families were a minority (30 percent); today, more than 70 percent of middle-class families need two incomes to hang on to their middle-class lifestyles.

 

With two earners working longer hours there is less time for family, less time for nurturing children, less time for helping with homework, and lower grades at school.

 

As income is closely related to level of education, Ms. Yalnizyan points out, “there are fewer people in that band of income 20 percent on either side of the middle. The middle is getting squeezed, and that’s not good for any of us.”

 

Middle-class Neighbourhoods Declining

Social work professor and housing expert David Hulchanski has been charting the changes in the middle class in Toronto over a period of three decades. In 2007, Hulchanski and his University of Toronto team published their study Three Cities within Toronto.

 

What the group found was that between 1970 and 2000 the number of middle-income neighbourhoods in the city declined. At the same time, the number of low-income areas increased.

 

The size of the change was significant; middle-class communities fell from 66 percent in the early 1970s to 29 percent in 2005. Hulchanski said, “You always expect some up and down, but to have that kind of consistent decrease was amazing.”

 

Meanwhile, a small number of very rich families have taken over the city core, areas that used to be low- and middle-income. Professor Hulchanski adds that similar dramatic changes have been observed in Montreal and Vancouver.

 

Suburbia Affected by Middle-class Decline

Writing about the U of T study in the Globe and Mail (December 20, 2007), John Barber points out that, “the data show the same trends occurring in the outer suburbs, albeit at a slower pace. The inevitable conclusion, according to Prof. Hulchanski, is that middle-income Torontonians are not merely moving to the [outer edges of the city]. They’re disappearing.”

 

Middle-income Jobs Vanishing

The middle class is declining because the good-paying jobs that sustained it are going elsewhere. For decades, semi-skilled workers could find factory jobs that allowed them to buy a modest home and raise a family. Those manufacturing jobs have been going to low-wage countries in Asia at an increasing pace.

 

A Statistics Canada report (February 20, 2009) measured the recent decline: “Canada lost nearly 322,000 manufacturing jobs from 2004 to 2008, with more than one in seven manufacturing jobs disappearing over the period.”

 

The people losing these jobs generally are not able to find work that pays as well. A January 2007 Statistics Canada study found that “displaced men experience long-term earnings losses that represent between 18 percent and 35 percent” of what they were earning before being let go.

 

Sources

“Defining the Middle Class.” Doug Saunders, Globe and Mail, July 24, 2007.

“Toronto Divided: a Tale of Three Cities.” John Barber, Globe and Mail, December 20, 2007.

“Study: Trends in Manufacturing Employment.” Statistics Canada, February 20, 2009

“Income Inequality and the Pursuit of Prosperity.” Armine Yalnizyan, Canadian Centre for Policy Alternatives, March 10, 2009.

 

© Canada and the World, April 2011

All rights reserved

 

 

 

EXECUTIVE PAY

 

While many middle class Canadians are having a rough time juggling tight budget, top executives are doing very well.

 

According to the Canadian Centre for Policy Alternatives “The total average compensation for Canada’s 100 highest paid CEOs was $7,300,884 in 2008—a stark contrast from the total average Canadian income of $42,305.

 

“They pocketed what takes Canadians earning an average income an entire year to make by 1:06 pm January 4 - the first working day of the year.”