For the duration of the election, The Globe is answering your questions – from fact-checking leaders’ statements to digging deep into policies and promises. Have a question? Tweet it with #AskTheGlobe
Our first selected question comes from reader Andrea Jarman: Who is the middle class? #AskTheGlobe #elxn42
Globe business reporter Tavia Grant has the answer:
There is no single definition! This seems to be the defining trait of the middle class, partly because it’s so subjective. It also depends on where you live – the concept, and trends, are very different in the United States (where the middle class has been under more pressure) compared with Canada, or in Vancouver (where the cost of living is vastly higher) compared with Charlottetown.
But here are some of the views.
An easy definition is looking at where the middle falls in terms of incomes. The median after-tax income in Canada is $50,700 for all family units, according to Statistics Canada’s most recent data. This means half of the population has incomes below that point, and half are above. That $50,700 number compares with $50,400 in 2007 and $48,000 back in 1976, in constant dollars. (You can have a look at the trends yourself in this table).
One recent paper, by Philip Cross and Munir Sheikh, which we wrote about here, puts forward several definitions of the middle class (one of the ranges it cites for families are incomes of between $40,000 and $70,000). It finds, broadly speaking, that middle-class income growth hasn’t kept pace with higher-earning income growth over the past 30 years, and that there has been a “slight shrinkage” of the size of the middle class.
The idea also depends on which kind of family you live in. Another range in this IRPP post on families with kids under 18, by Jennifer Robson, shows a range, with median earned income of $31,000 for a lone-parent family with one child, up to $99,000 among dual-earner couple with two kids.
She stresses that it’s important, when thinking about policy, to look beyond just incomes. “Even if you want to stick to quantifiable economic resources as measures of ‘middle class,’ I think assets and debt really matter too,” she notes.
That broader measure is to look at wealth – which includes assets like houses and pensions, minus debt. By net worth, the middle fifth of families had wealth of $453,300 in 2012, a Statistics Canada paper showed. (Its same study puts the middle quintile of family income at an average of $57,200, before tax).
Then there are subjective ways of looking at the middle class – such as lifestyle, aspirations and hope – whether one’s quality of life will match the previous generation. There is also self-identification – the vast majority of people see themselves as being middle class do, regardless of income levels.
We took a look at this question a few years ago as part of the Globe’s income inequality series.
So what’s up with the oft-repeating phrase “middle class angst”? It may stem from the run-up in household debt or expensive housing, a changing jobs market, or it may come in thinking Canadian trends are identical to U.S. ones, which they aren’t.
If you’re curious about middle-class trends in the U.S., a thorough examination was released by the St. Louis Fed. Unlike most Canadian analysis, it includes details on race.
For more, check out this video.