The middle class is a funny thing.
Though economists don’t have a single definition for it, the term does indicate a group of people who stand in the middle of an income distribution. And yet, everyone — rich or poor — thinks they’re middle class.
Surveys have shown this over and over both in Canada and the U.S. It’s one reason why politicians love the word so much: When they say “middle class,” the vast majority of voters thinks it’s about them, even though it might not be.
So what does it take in Canada to be in the middle class? The median household income reached $70,336 in 2015, according to the latest census data. That is the middle point of the national income ladder.
But as everyone knows, $70,000 a year can be plenty — or not — depending on where you live. So Global News asked Statistics Canada to provide data showing the household income distribution in census metropolitan areas and census agglomerations across the country. StatsCan came up with local income rankings based on the 2016 census and sliced them up into five groups of equal size. The middle three groups, or quintiles, represent what you might call the middle class. The numbers refer to all households, that is, individuals living alone, couples, couples with children, single parents with children and groups of two or more individuals living together under the same roof.
Here’s what the middle class looks like across Canada:
In Alberta ‘middle class’ often means a six-figure income
The data highlights “very big differences across the country,” said Kevin Milligan, professor of economics at the University of British Columbia.
For example, Fort McMurray, in the heart of Alberta’s Athabasca oil sands, is a “huge outlier,” said Milligan.
As of 2015, when the census data was collected, it took a household income of over $91,000 just to make it into the very bottom of Fort McMurray’s middle class. To be in the third quintile — the middle section of the middle class — you had to be making, roughly, between $163,000 and $221,000. Being in the top quintile took around $300,000, over twice the minimum of $131,000 it takes, on average, in Canada.
Middle-class incomes in Alberta often cross the $100,000 mark, including in both Calgary and Edmonton.
Of course, since the data is from 2015, the census likely represents a snapshot of a resource boom that was just about to go bust. Between January of that year and November of 2016, many in Alberta lost their jobs, as the unemployment rate nearly doubled to reach 9 per cent.
But if the recession hit Albertans hard in terms of joblessness, it hasn’t drastically yanked down incomes, said Milligan.
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At the other end of ‘middle class’
A household income of just over $87,000, which wouldn’t have been enough to break into the middle class in Fort McMurray, is all it takes to reach the top income group in Thetford Mines, Que., a former asbestos mining town.
Including Thetford Mines, six of the 10 communities with Canada’s poorest middle class are located in Quebec, three in Ontario and one, Campbellton, in New Brunswick.
Overall, communities at both ends of our ranking of middle-class incomes show just how important natural resources can be for local economies in Canada and what happens when things go bust for good, said Milligan.
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The middle pack of the middle class: government jobs and unions
Firmly lodged in the middle of our income ranking are many of Canada’s capital cities. Here it takes a fairly high income to be part of the middle class but reaching the top income group is relatively easy compared to many other parts of the country.
In places like Ottawa and Regina, for example, median incomes weigh in at over $80,000, well above the national median, but to overshoot the middle class you need roughly $155,000 and $151,000 respectively. That’s far less than what the upper crust earns in many communities in Western Canada.
In all likelihood, you can thank public-sector unions for that, said Milligan.
And unions, this time in the private sector, are probably helping to prop up incomes in manufacturing centres like Oshawa, Ont., said Milligan. Oshawa is home to a major General Motors auto assembly plant. Here, the middle section of the middle class has incomes of between $70,000 and $102,000 — higher than in Toronto.
In general, many factory towns appear to be faring better than Milligan expected. Even Windsor, Ont., where median incomes have dropped by over six per cent between 2005 and 2015, is nowhere near the bottom of our middle-class ranking.
So how’s the middle class doing in Canada?
Even among economists, it depends on who you ask.
Stephen Gordon, a professor of economics at Université Laval, believes that things, overall, are “not bad.”
In 2013, when Justin Trudeau was laying the groundwork for an electoral campaign pitch focused on helping average-income Canada, he took issue with the Liberals’ portrayal of a struggling middle class.
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Adjusted for inflation, middle class incomes were lower in 2011 than they were in 1976, he acknowledged. But that masked the fact that they had taken a dive between the 1980s and the mid-1990s, only to then recoup most of the ground lost.
Middle-class wages seemed to get out of their funk around the year 2000, Gordon told Global News.
Gordon also challenges the idea of a middle class that has been “hollowed out,” another notion dear to the Liberals.
When you measure the middle class in terms of the share of the population with incomes around the median, Canada’s middle-class ranks have held remarkably steady, he noted. Canada, in other words, is not America’s midwest.
Even when you look at the gap between the rich and the poor, things are better than they have been. Canada’s Gini co-efficient, a key measure of income inequality, started rising in the 1990s, but levelled off in the 2000s. Inequality is higher than it was in the 1980s but doesn’t seem to be getting worse.
The rich aren’t getting richer as fast as they used to, either, according to Gordon. The share of riches going to those at the top of Canada’s income distribution had been growing larger until about a decade ago, but that trend seems to have peaked, Gordon told Global News.
Milligan, however, takes a dimmer view of the state of Canada’s middle class. The oil boom likely helped lift income measures at the national level, but the data also shows “how important the regional dimension is.”
“Alberta and Newfoundland have done super well,” said Milligan.
“Ontario and Quebec and B.C. aren’t quite as bad as the U.S. midwest, but do look much like the rest of the U.S.,” he wrote via email. And that’s even though a soaring housing market has softened the blow in B.C. and Ontario.
And while middle-class wages have seen some growth in the past 10 years, that pales in comparison to what the top one per cent of wealthy Canadians has enjoyed, Milligan noted.
Runaway incomes at the top, he warned, “can play into the politics of things.”
“If you don’t have an income distribution where everyone is seeing the benefit of growth,” he warned, “you can end up with some pretty bad politics.”
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