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Having the Richest Middle Class Isn't a Good Thing For Canada

04/24/2014 12:01 EDT | Updated 06/24/2014 05:59 EDT
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For years, Canada's politicians have wondered who the middle class are and what do they want. This week, we add a fresh question -- are they satisfied with being number one?

Much has been made of a lengthy story published on the New York Times' wonky new blog declaring that "The American Middle Class Is No Longer the World's Richest." They quote stats from something called the "Luxembourg Income Study Database" and conclude that American median wages -- long the most impressive in the world -- have been "most likely surpassed" by median wages in Canada. So now it's our middle class that "appears to be the richest," in the satisfied words of the Globe and Mail .

The hard numbers are a bit hazy. All those "most likely"s and "appear to be"s reflect the fact that the Luxembourg study's most recent figures come from 2010, when Canada-U.S. wages were merely equal, topped off by the observation that in the years since, "pay in Canada has risen faster than pay in the United States," and is therefore "most likely higher" circa 2014. For what it's worth, Stats Can's 2011 National Household Survey said our median individual income was around $27,000 per year, so the global high for middle class pay is evidently somewhere in that ballpark.

Anyway, since their release, these findings have been spun in all sorts of tendentious directions on both sides of the border.

In the States, Republicans have found one more damning indictment of the "Obama economy," while liberals see further proof of a creeping plutocracy, noting the blog's explicit diagnosis of overpaid CEOs and insufficient profit "redistribution" as a leading cause of the middle class slip.

Leftists in this country, meanwhile, have blamed Canada's rising wages on slumping income tax rates, which they bemoan for helping defund the welfare state. Other skeptics have questioned whether Canada is really doing "better" than the States, or merely "less worse," given our greedy CEOs are certainly getting richer at the expense of everyone else, too.

Perhaps the most persuasive sniffs of pessimism, however, were those observing what Reihan Salam at the conservative National Review dubbed the "elephant in the room" of any Canada-US net worth comparison -- Canada's ludicrous and unsustainable housing boom, which has not only provided the country with an overabundance of good-paying, construction jobs, but shielded this half of the continent from the "massive wealth destruction" that followed the American housing crash of 2008-9. Such critics see parallels between the irrational exuberance of contemporary Canadians, who feel no shame spending far more than they earn on the assumption that if anything goes wrong, they can always sell their house for a quick million, and the similarly cocksure short-sightedness that defined pre-recession America.

"Canadians are standing on their rooftops screaming for more debt while too many Americans are buried under their houses," as the Atlantic put it.

Yet regardless of how sustainable it may be in the long term, having the richest middle class in the world could still prove deeply disruptive for Canada's increasingly middle class-centric political debate -- which exists in no term but the short.

The Liberal Party has been particularly vocal in wanting to make the supposed plight of the Canadian middle class the cornerstone of the Justin-for-PM campaign, yet if the Luxembourgers are to be believed, such a slogan could soon carry the disingenuous air of campaigning in the Sahara and promising to address the chronic sand shortage.

Many economists and analysts have made much of the fact that Canadian income inequality isn't actually that bad, especially since middle class wages have been growing at a relatively steady clip for several decades now. For a party that's made so much hay over the need for scientifically-grounded policy, there's a point in which prioritizing economic ideology over economic fact becomes too hypocritical for voters to ignore.

Yet it would be equally disingenuous for Conservatives to claim, as Minister Kenney has done on Twitter recently, that because a gang of academics at some think tank no one's heard of say Canada's middle class have nothing to fret, that means they shouldn't. Economic anxiety cannot be dissolved simply by waving a report.

The crime rate is a good analogy. "Expert opinion" is usually deeply critical of the Tory government's famed tough-on-crime agenda -- mandatory minimums and the like -- which they characterize as a solution in search of a problem, given Canada's record-low crime rate. Yet tough-on-crime still polls enormously well with the public, in part because the public still perceives the issue to matter. They don't view crime through the prism of bar graphs and scatter plots, they view it in terms of how safe they feel on the streets and the headlines they read in the papers. They don't want a crime rate that's lower than Paraguay or whatever, they want a crime rate that's lower than what we have now.

Such is likely to remain true with economic issues, which middle class Canadians will probably continue to volunteer as their number one priority for politicians even as they sit in such a globally enviable position. There will always be friends and family who are unemployed and underemployed. There will always be businesses closing and layoffs looming. Canada's middle class might be comparatively comfy, but comfort is relative.

Presuming Americans would be grateful for the bounties of the post-war boom years, Democrat Adlai Stevenson ran for president in 1952 with the peppy slogan "You've Never Had it So Good." The Republicans quickly subverted it with a series of clever ads interviewing incredulous men on the street, and what was supposed to be an uplifting call to keeping the good times rolling was transformed into an insensitive crow of ruling party arrogance.

This is why there was no President Stevenson. It's a tale triumphalist Tories would be wise to remember.

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