Canada has overtaken the United States as having the richest middle class in the world, according to a new report from the New York Times.
Though the richest Americans still earn more than their counterparts in other developed nations, the growth of America’s middle class has remained comparatively stagnant over the last decade. The average income, after tax, for a family of four in the U.S. is $75,000. Though an exact average was not provided for Canada, the authors of the report conclude that it is “most likely” higher, since wages in Canada caught up to the U.S. back in 2010, and have likely now surpassed them.
Canada’s mid-level strength, the report argues, is likely due to the country’s wealth re-distribution policies. However, some financial experts in Canada are concerned that Canada’s wealth gap is now, in fact, growing in similar fashion to the U.S.
“Increasingly, whatever wage gains there are have been tilted to a select group of higher-paid sectors, leaving the median worker with leaner improvements,” said economists at CIBC in a report last month.
The CIBC report also found that median wages in the country are not growing as fast as other incomes, with only 1 percent improvement last year. Additionally, middle-class Canadians have less disposable income than expected.
Still, however, Canada’s middle-class was not as hard hit during the recent global recession as many Americans, particularly those who lost thousands in the recent housing bust. Overall, the Canadian system appears to have more checks in place to ensure the economic stability of its middle-class, though these certainly do not dissolve Canadians of having fiscal responsibility, particularly in light of recent concerns over the country’s growing consumer debt.
Source: Global News