The Globe has been publishing a great series The Wealth Paradox, which has sparked a lot of interest from readers. The series has looked at the causes of the rise of the 1 per cent, the consequences for those who are struggling and the solutions and tools for change.
I’ve heard from a few readers and also seen a few comments from those who want to know: how do you define the middle class? If you have other questions on the series, please send them to me and I will put them to Globe writers and editors.
Halfway or so through this feature, the 1 per cent has been defined, but persistently the middle class has not. Is everyone cited in the articles using the same reference point when discussing statistics related to income growth or stagnation?
Globe business writer Tavia Grant, whose piece Inconvenient Truths dispels the myths of the middle-class squeeze, says that defining the middle class is not easy and that people tend to self-identify as middle class even when they might be considered upper class.
“As mentioned in today’s story, being ‘middle class’ is a highly subjective notion, but where most Canadians tend to see themselves. We sat down with a top income expert at Statistics Canada this fall in Ottawa, who mentioned that subjectivity, and that its data focuses on middle incomes rather than middle class – medians, averages or middle quintiles,” Ms. Grant said. “The data in much of my story refers to medians.” Note from the article: The median after-tax income for all family units was $50,700 in 2011 compared to $48,200 in 1981 – an increase of $2,500 in constant dollars, according to Statscan. But as the article shows the slight increase isn’t nearly as large as for the top earners.
Another story by Globe business writer Greg Keenan used pre-tax dollars on the middle class. It said; “By 2010, median pre-tax family incomes stood at $57,000 – modestly higher than in 2000, but at the same level as 1980, after adjusting for inflation. Median wages for men barely budged between 2000 and 2010 at about $42,000.”
“There are many ways to analyze income trends, but most every chart I’ve seen , sliced any way, tends to show slow income growth for people in the middle, and much quicker growth for those at the top of the income ladder,” Ms. Grant said.
Our series highlighted the growth among top earners because journalism is generally about documenting change (rather than stagnancy), Ms. Grant added. The Globe “generally used Statscan data tables, along with a slew of academic research, to shape our methodology and aimed to ensure it was consistent throughout all the stories.”
Ms. Grant also noted that one reason why people may have the impression that a middle-class lifestyle is becoming increasingly out of reach may stem from popular culture. “TV shows like Modern Family, Arrested Development and Friends appear to depict the middle class, but they’re actually about fairly affluent people. It may add to the sense that a middle-class lifestyle is increasingly unaffordable.”
Report on Business features editor Nicole MacAdam noted that the objective of the series was “to highlight the fact that these quintiles (those in the middle, and the bottom) are becoming more ‘sticky,’ i.e. it’s less likely for people to move up (and also less likely for those at the top to move down).
“While people in the top quintiles are amassing wealth in greater and greater quantities, those in the middle and the bottom are increasingly ‘stuck,’ they’re not making any real wage gains, which means they can’t move to a higher quintile. Income mobility is at risk if these trends carry on unchecked. That’s a problem in economic terms, not to mention there are fairly serious social and democratic implications.
“Politicians of all stripes are attempting to address these issues, but we wanted to focus on solutions we thought would have the most impact (and consulted widely with experts to that end).”
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