Middle-class income stagnation has become a common theme in many countries, and new data suggest Canada is not immune.
Median after-tax income for families was $68,000 in 2011, “virtually unchanged” from a year earlier, Statistics Canada’s annual report on income trends shows.
“This was the fourth consecutive year without significant change in after-tax income,” the agency said.
The numbers offer some explanation why many middle-income households may be feeling squeezed, as prices for homes and food have soared. (In fact, a separate Statscan release Thursday showed the five-year cumulative food price inflation seen between 2007 and 2012 is among the highest in 20 years). Stagnating incomes, rising costs, low interest rates and consumer culture all explain why Canada’s household debt levels have hit record highs in recent years.
Since 2007 – the year before the recession – after-tax income has grown 1.9 per cent, from $66,700.
Some households are faring better: Two-parent families with children saw their median after-tax income rise by $2,500 between 2010 and 2011. However, there was “no significant change” in median incomes for other family types. Single people, for example, saw no change in median after-tax income.
The data come from the agency’s survey of labour and income dynamics, and are based largely on medians – or the level of income at which half of the population had higher income and half had lower.
Poverty rates, meantime, haven’t changed much. Three million Canadians, or 8.8 per cent of the population, lived in low income in 2011, unchanged from 2010, according to the after-tax low-income cut-offs.
That’s fewer than a decade earlier, though, when 3.4 million people, or 11.2 per cent, fell into the low-income category.
Still, more than half a million children – 571,000 aged 17 and under, or 8.5 per cent – lived in low income in 2011, also unchanged from a year earlier. Nearly a quarter of children living with a single mother are in the low-income category, while for kids living in two-parent families, the rate was 5.9 per cent – both little changed from a year earlier.
Among those living on their own, about 199,000 seniors, or 14.9 per cent, and 1.2 million people under the age of 65, or 32.3 per cent, lived in low-income status in 2011, both little changed from 2010.
The middle class may be stagnating in most parts of Canada – but not Alberta. It was the only province where families saw a solid improvement in median after-tax income, growing to $83,800 in 2011 from $80,400 a year earlier. It’s a contrast to Ontario, where single people saw median income tumble to $25,900 from $28,600.
Families in Alberta had the country’s highest median after-tax income, at $83,800, followed by Saskatchewan, Ontario and British Columbia.
This is the last such release from Statscan. Starting next year, the data will come from a new Canadian income survey.