Justin Trudeau’s Liberals have made it clear that their plan for the 2015 election is to target the ‘middle class’. The phrase is probably the most commonly used in recent political history. Everyone wants to court the middle class because nearly everyone thinks that they are part of the middle class. It will be interesting to see who, exactly, Trudeau wants to help though because decades of supply side, neo conservative policies have dramatically changed what ‘middle class’ means.
According to Gail Vaz-Oxlade at Moneysense.ca:
“Economists don’t really agree on what constitutes a middle class income. We know the upper class is the top 20% of income earners and the lower class are the bottom 20%. Everyone else falls in the middle. Since the median income for Canadian families (in 2010) was just less than $70,000, then making somewhere between $60,000 and $85,000 will plop you in the middle quintile of Canadian families.”
Using Vaz-Oxlade’s definition could be helpful, but we have to set aside the median income because it is currently skewed. According to Statistics Canada the median income in 2011 was $72,400 however only 3.4 million Canadians made $75,000 or more. That means that only the top 10% of earners made more than the ‘median’. The median is supposed to be the middle, but it may be that the 180,470 who made more than 250,000 made so much more than the median that it skewed the statistics.
If we keep it simple and say that “the upper class is the top 20% of income earners and the lower class are the bottom 20%. Everyone else falls in the middle” it paints a very different picture. In 2011 7,183,920 Canadians, roughly 20% of the population, made $50,000 or more. The bottom 20% is a bit more difficult to calculate because the less a person makes the more difficult it is to estimate their income. What we can do though is use low income cut-off of $18,421 for an individual and call that the lower class, after all we know that more than 20% of the population falls into that category and you can’t be middle class and below the poverty line right?
Using this math, the middle class would be people who made between $20 – 50 thousand annually. According to Statistics Canada that would mean roughly 9.5 million Canadians, or 27% of the population was ‘middle class’. So, are those the people Trudeau plans to help? Or is he talking about people who think that they are middle class? I’m pretty sure that most people making $75 thousand don’t know that they are upper class now and I’m pretty sure that most people making $20 thousand don’t know they are middle class.
Everyone knows that the ‘rich get richer and the poor get poorer’ but the extent to which that has happened in recent years hasn’t fully made its way into the popular psyche. The reality is that trickle down economics, the theory that still drives conservative economic policies, hasn’t worked at all. Tax breaks for the wealthy and corporations do not create and have not created jobs or increased prosperity for anyone except the direct recipients of those breaks. Combined with the mistaken belief that Gross Domestic Product and government debt are related the end result of conservative policies has been a rapid dwindling of government resources and a resulting loss of services that used to benefit and increase the middle class. Cuts to government employment rolls, education, health care, infrastructure and other key areas have damaged overall economic prosperity and quality of life for most Canadians.
All of this has created a confusing situation where the middle class has become the upper class without a change in income and full-time, minimum wage service workers are now part of the lower middle-class. So, when Trudeau says that he plans to help the middle class it is not clear to me, at all, who he is talking about. It may not be clear to the Liberals themselves. They have said that they won’t share specific proposals until 2015. That could be a political strategy meant to keep other parties from adopting or attacking their plans but it could also very well mean that they do not have any specific proposals right now. It would be helpful though if Justin Trudeau could at least tell us what he means by ‘middle class’.