Canada’s Middle Class Surpasses U.S. in Wealth
The American middle class is no longer the world’s richest. That distinction now goes to our northern neighbors in Canada, where wages have shot up nearly 20 percent in the last decade, mirroring the increases also seen in Britain.
Foreclosure lawyers in Miami know that in the U.S., however, wages have remained virtually flat for the middle class, rising just 0.3 percent during that same time period.
That’s according to new figures released by the Luxembourg Income Study Database. Miami consumer rights attorneys understand that there are three theories as to why America has lost such significant ground in recent years. Those include:
- The fact that Canada’s educational system and attainment has outpaced the U.S. and most of the world.
- The fact that American middle class wages haven’t kept pace with overall economic growth.
- Other governments to a better job of redistributing income to poorer families.
Satirist Steven Colbert highlighted the issue in a recent segment in which his ultra-conservative character lamented the shift, and pondered whether further tax cuts for the rich might be the solution.
“Because how can we distribute the wealth if we don’t first have all of it?” he asked.
All joking aside, another critical factor in our decline isn’t mentioned in the Luxembourg report, and that’s housing. The U.S. is just now emerging from what was a catastrophic collapse of our housing market that effectively obliterated the wealth held by millions of families in the middle class.
Meanwhile, Canada hasn’t hit that wall. It is, however, in the midst of a housing boom that many economists say mirror where the U.S. was about 10 years ago, before the bubble burst.
Meanwhile, median earners in Canada have been gaining on the U.S. for many years. They are buoyed by a service economy that is especially strong and a large energy industry.
Overall, America is still 15 percent richer than Canada when you consider GDP-per-capita, but the wealth is far less evenly distributed here. The wealthy are continuing to get even richer, while the divide between them and the middle class is growing exponentially.
In 2010, the median per capita income in the U.S. was $18,700. For a family of four after taxes, that translates to about $75,000. That’s up roughly 20 percent since 1980, but it’s essentially the exact same as it was in 2000 (after we adjust for inflation).
Meanwhile in both Canada and Britain, income increased by nearly 20 percent during the same time frame. That’s about another $19,000 more per family per year. Even in the Netherlands, income rose by 14 percent, The New York Times reports.
While the Luxmebourg model only goes to 2010, other models suggest that Canada has continued to outpace the U.S. middle class in earnings in the years since.
The fact that educational attainment in the U.S. has decreased dramatically over the last 30 years means that Americans are having a tougher time maintaining highly-skilled, well-paying positions. It doesn’t help that top executives at American firms make an insane amount of money – far more than in any other country in the world. And yet, minimum wage is lower and labor unions are weaker.
When we look at the literacy, technology and numeracy skills of 55-to-65-year-old Americans, we see these are far above those in the rest of the industrialized world. However, according to new research by the Organization for Economic Cooperation and Development, we can’t say the same for younger Americans. For those between the ages of 16 and 24, Americans rank among the bottom in these fields when compared to other wealthier countries, falling well behind Japan, Canada, Australia and even Scandinavia. It’s closer in line to those in Spain and Italy.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.