Canada's middle class breaks alarmingly along age lines

Middle-Class-Break.jpgOur latest report shows there is no uniform squeeze on the middle class as suggested by federal opposition parties, nor a uniform gain as urged by the Prime Minister. The squeeze is real, but it primarily hurts Canadians under age 45.

We report that:

  • Canadians in their mid-40s and younger earn thousands less for full-time work compared to 1976- 1980 even though they devote years more to postsecondary.

  • The typical young person has to work five years more to save a down payment on an average home.

  • Despite low interest rates, today’s young person works a month more per year to pay the mortgage.

  • The same housing prices that squeeze younger generations for time and money drive wealth accumulation for those aged 55+ by at least $165,000 compared to the same age group in 1977.

  • Added wealth for those 55+ comes on top of improvements to total household income that are $14,000 to $17,000 higher than in 1976-1980.

This information is critical heading into the federal budget and election, because Canadian governments of all political stripes have failed for decades to prioritize younger generations with the same urgency they prioritize others when establishing their spending goals.

Our study finds that:

  • Canadian governments have prioritized adapting to the health and retirement income needs of the aging population by adding $58 billion in annual spending for those age 65+ compared to 1976.

  • There has been no corresponding increase in government revenue to pay for even half of this additional spending on retirees.

  • As a result, combined spending on parental time, household income and community services like childcare has remained flat over the last 40 years, while education spending has dropped.

  • What has increased markedly for younger people is the government debt/GDP level they inherit today compared to the same age group in 1976, along with risks associated with climate change.

We can and should protect medical care and old age security for the aging population. But no grandmother knowingly chooses to pay for her medical care by not paying for her children’s child care. Nor does any aging father knowingly opt for his retirement security to be funded by asking his kids to pay tuition that is double what was charged for postsecondary a generation ago.

Yet these are precisely the trade-offs that our governments impose on Canadians. We published this study as part of our plan to end these harmful age trade-offs in politics so Canada works once again for all generations.

The full study, Population Aging, Generational Equity and the Middle Class, is available at:

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  • commented 2015-05-25 04:59:17 -0700
    The goals of the protest group are Pay off student debt, Find a good job, Reduce the time it takes to save for a home, Afford a family, Save for retirement, All while leaving at least as much as we inherited. I am happy to report that all of this is possible now! Here is a solution that worked for myself and my family: go where the work is, live where you can afford with the job in that place. Working the Alberta oil patch up in Fort St. John is still affordable; you can buy a house there and have a single working head of household, the other parent at home. These protest groups are the city folks. Jobs in Vancouver do not pay enough to live in Vancouver. You do not have to go to Fort St. John with the 7 months of winter to have affordable living; Powell River paper mill jobs will do just fine as well. Working at UBC as an assistant professor pays more than teaching at a community college up country, but if having a house and spare time is most important, who cares? Vancouver houses are a million dollars, but a Burns Lake 3 bedroom is $100,00 and the College of New Caledonia is hiring. Many jobs up in the frontier actually pay more than downtown Vancouver jobs. Mechanical Engineers make $35 per hour, for example. There are plenty of Burns Lake type communities in Canada. Is moving out of Southern BC out of the question for you? OK, so you are a bit of a city snob, no problem.

    If you do not want to move to the middle of nowhere, which is really, the majority of places in Canada, then there is more good news: it is still possible to live cheap in the Fraser Valley of British Columbia. My parents have an acre property, within an hour drive to Vancouver, with rent of a couple of thousand dollars—per year. You can, too. How? Well, the neighbors are not white, and they do not pay taxes. Yes, native land; reserves can rent out land to anyone, you can live there for less than the taxes on the house one road over, off the reserve. Out of the question for you? OK, so you are a bit of a racist, no problem.

    I personally lived right close to downtown Vancouver for $220 per month, with my own place, which I purchased outright for $2500. It was one bedroom waterfront property. OK, two berths and it was floating. Old wooden boats are sold stunningly cheap because of the huge amount of time required to maintain them. Sanding, scraping, painting—finally, I decided to fiberglass over the leaks in the roof, since my cloths were getting wet in the closet. Thinking things though after the fact, if water is dripping on clothing and the holes are filled with dripping resin, where will the resin drip? Tip: remove your clothing from the closet before fiberglassing the leaking roof. I fiberglassed my clothing into a coat of amour. Is old wooden boat maintenance is out of the question for you? OK, so you are boring with no sense of adventure. No problem.

    Several of my friends lived rent free or highly subsidized, right downtown. There are plenty of government programs to do exactly that. The whole secret is to proactively manage the category of person you are. Best option would be a disabled female person of color. She did not seem too disabled when I was giving her a therapeutic nude massage overnight at her quite acceptable apartment, but she sure was a pretty brown color. The rent was a few hundred dollars a month. OK, so the morality is a little flexible, but nearly every one of us can fit into some kind of protected category or other. Canada’s laws are so broad, we can all get a break right now, no need to change a thing legally!

  • published this page in Blog 2015-04-14 13:16:24 -0700

“Yes, Canadian governments need to make younger people a priority. I want a Canada that works for all generations."

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