'Canadian dream' is a myth more than a reality"

[Red John]

Yup, it's all about living within your means.

Pretty funny to see comments about "social unrest" when these same middle-class people who apparently can't get ahead financially are still going on nice vacations every year, carrying loans on two cars, have a maxed-out card or unsecured LOC, go out drinking once a week, and eat out at restaurants constantly. Or the ones with kids who take private music lessons, play organized hockey and learn a 2nd language on the weekend. There's a good chance one or more of these factors applies to most middle-class.

Check to see the business numbers of car dealerships or these restaurants and you'll see they aren't hurting at all. Why do you think every dealer is offering bi-weekly financing over 84-96 months these days? A Mazda dealership in the Okanagan is advertising buying a car for $7/day right now. This isn't to lure in the rich clients that's for sure. It's all aimed at the middle class.

It's anecdotal evidence obviously but one of my close relatives raises a family of nine kids on a single income (which is less than 50k). They carry a mortgage too. It seems impossible from an outside standpoint but they just don't blow their money on luxuries. No new cars. No vacations. A lot of clothes for kids are hand me downs.

The point is, 100k is a LOT of money to live on comfortably if you're willing to adjust your lifestyle accordingly, and most people aren't. It's amazing to see people living off dual incomes who are still elbows deep in debt and it's because it's not how much money is coming in, it's how much is going back out.

Live within your means. That may mean sacrificing the hockey season tickets, or the golf membership, or the car lease, or the trip to Maui every year.

People like "V" get it.

[nik-]

Originally Posted by Red John

Yup, it's all about living within your means.

Pretty funny to see comments about "social unrest" when these same middle-class people who apparently can't get ahead financially are still going on nice vacations every year, carrying loans on two cars, have a maxed-out card or unsecured LOC, go out drinking once a week, and eat out at restaurants constantly. Or the ones with kids who take private music lessons, play organized hockey and learn a 2nd language on the weekend. There's a good chance one or more of these factors applies to most middle-class.

Check to see the business numbers of car dealerships or these restaurants and you'll see they aren't hurting at all. Why do you think every dealer is offering bi-weekly financing over 84-96 months these days? A Mazda dealership in the Okanagan is advertising buying a car for $7/day right now. This isn't to lure in the rich clients that's for sure. It's all aimed at the middle class.

It's anecdotal evidence obviously but one of my close relatives raises a family of nine kids on a single income (which is less than 50k). They carry a mortgage too. It seems impossible from an outside standpoint but they just don't blow their money on luxuries. No new cars. No vacations. A lot of clothes for kids are hand me downs.

The point is, 100k is a LOT of money to live on comfortably if you're willing to adjust your lifestyle accordingly, and most people aren't. It's amazing to see people living off dual incomes who are still elbows deep in debt and it's because it's not how much money is coming in, it's how much is going back out.

Live within your means. That may mean sacrificing the hockey season tickets, or the golf membership, or the car lease, or the trip to Maui every year.

People like "V" get it.

That's all fine and good, and yes, people live beyond their means.

But that doesn't change this:



Top salaries are going up, and moderate and low aren't. No matter what anyone's budgeting choices are, that is an issue. Especially when the sector that isn't going up makes up the vast majority of the nation and thus the economic drivers.

[SebC]

Originally Posted by GGG

Doesn't this graph show that the middle class is doing fine? This accounts for inflation by putting thing into 2011 dollars. I suppose that only partially considers purchasing power as inflation of housing recently has been greather than general inflation.

It shows, roughly, that the growth of real GDP is not creating benefits for the middle class, or the lower class - it's all being captured by the upper class.

[FlamesAddiction]

$100k per year is still a dream for most Canadians. The average income is less than half of that.

Could you raise a family and own a home on $48,500 (the national average)? Even in oil-rich Alberta, the average income is only $58,000.

[MarchHare]

Originally Posted by FlamesAddiction

$100k per year is still a dream for most Canadians. The average income is less than half of that.

Could you raise a family and own a home on $48,500 (the national average)? Even in oil-rich Alberta, the average income is only $58,000.

An an important distinction is that that number is for individual earners, not families. The national median household income is $72k (most families are dual-income); in Alberta, it's $90k.

Source (2011 figures): http://www.statcan.gc.ca/tables-tabl...il108a-eng.htm

[V]

No, probably not. That would probably be too little. How is that average calculated? Seems incredibly low for Alberta. Is it a median or a mean? What does it include, everything? Semi-retired, kids working at McD's, etc? Do you have a website that goes into the calculation?

[Oil Stain]

Originally Posted by FlamesAddiction

That might be part of it, but I don't think the pie has actually shrunk at all... just the section of the pie that the lower and middle classes used to share is disproportionately smaller now. The upper class has seen massive increases to their wealth during the same period. This is one of the reasons why the cost of living and property values continued to rise despite the middle class remaining stagnant for the most part.

If the highest earners are earning more now relative to their peers than in the 60-70's doesn't that jive well with a falling emphasis on manufacturing?

Perhaps highly skilled and educated workers earning more is a natural outcome as their total contribution to the economy has risen relative to their peers.

Some luxuries are more easily affordable (vacations) or accessible through credit (cars), but it's a façade and a trap for many people. It's not real wealth. Just curious, but did they buy the new cars outright or did they use credit? If they paid for them outright, then that is impressive and I wouldn't think the norm.

They bought on credit of course. My point was that they didn't have to buy new cars, but having a new car is now the expectation of seemingly everyone, middle class, or not. People now seem to expect a lot more then 30 years ago for the same effort expended.

http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=19

This website claims that the average hours worked in a week per Canadian worker is down from 38 hours a week to 36.6 hours a week since 1976.

So the middle class is still up in real world dollars and down in average hours worked per week despite falling behind the top 20% in real earnings.



Maybe the middle class is just as well, or better off as they were 30 years ago? If so, is it a problem that the highest earners have done even better?

If 100K a year is a dream for most Canadians, than perhaps it's just not as important to them as other aspects of their lives, because nearly anyone could move to Fort McMurray tomorrow and accomplish that dream. It just takes some effort and sacrifice. I think many of the 100K earners made that choice to spend less time with their familes, or have less free time, or spend more time studying, etc.

I mean its still ridiculously easy to be a top earner in Canada if that is your priority. Maybe more people are just more focused on work-life balance in today's age?

[tvp2003]

Originally Posted by Sliver

Wow dude, that sounds awesome. Straight up, it seems like you're doing life right. Thanks for sharing the details and sorry for being so skeptical.

If you measure based on what society thinks, he's doing it wrong:
- No new cars
- No exotic trips
- No fancy dinners

Makes you sad to think how "happiness" is defined these days.

It's also interesting to see someone's background and how that translates into their lifestyle as an adult. Makes it a little easier not to get caught up in a lifestyle that forces you to "keep up with the Jones". In V's case, single income family, paying for own education, even getting student loans, etc. Now driving affordable vehicles, saving for retirement, not spending excessively on vacations and other things (especially with four kids -- multiply a movie ticket or plane ticket x4 = $$$!). Also, nice job with the charitable donations

[nik-]

Originally Posted by tvp2003

If you measure based on what society thinks, he's doing it wrong:
- No new cars
- No exotic trips
- No fancy dinners

Makes you sad to think how "happiness" is defined these days.

It's also interesting to see someone's background and how that translates into their lifestyle as an adult. Makes it a little easier not to get caught up in a lifestyle that forces you to "keep up with the Jones". In V's case, single income family, paying for own education, even getting student loans, etc. Now driving affordable vehicles, saving for retirement, not spending excessively on vacations and other things (especially with four kids -- multiply a movie ticket or plane ticket x4 = $$$!). Also, nice job with the charitable donations

What are "these days" ?

Western Civilization has been all about consumption since the end of the second world war.

edit: Western Civilization is too broad, but North America for sure.

[Rathji]

Originally Posted by V

No, probably not. That would probably be too little. How is that average calculated? Seems incredibly low for Alberta. Is it a median or a mean? What does it include, everything? Semi-retired, kids working at McD's, etc? Do you have a website that goes into the calculation?

So kids working at Mcdonalds shouldn't be included? What about adults working at Walmart should be?

Just removing people at the low end of the income scale seems like a bad way to get something like an average.

[SebC]

One thing we really seem to have backwards as a society is that we use consumption to encourage production... we should be focussing on production as a means to support consumption.

[V]

No, I'm more getting at the question of household income, as opposed to just average income of individuals across the province. I'm looking for a frame of reference to understand what the average household is making. Same as the retired guy working as a greeter at Walmart.

The link MarchHare showed is median household income. So this already removes the scale of the high income earners. While we call it an average, and I guess median is a type of average, it's definitely not the mean. I don't know if that matters, though. It does in the sense that it doesn't answer the question of how much the average household makes. It only answers how many households make more than that value.

[V]

Originally Posted by nik-

Top salaries are going up, and moderate and low aren't. No matter what anyone's budgeting choices are, that is an issue. Especially when the sector that isn't going up makes up the vast majority of the nation and thus the economic drivers.

By my eye, high income has risen 27% since 1976 and middle income has risen 22%, while low income has risen 50%. While not equitable it's not that far off.

[darklord700]

Originally Posted by Rathji

So kids working at Mcdonalds shouldn't be included? What about adults working at Walmart should be?

Just removing people at the low end of the income scale seems like a bad way to get something like an average.

Kids working at Mickey Ds are earning to buy booze so they should be excluded.

Adult working in Walmart to raise a family should be included to make meaningful comparisions.

[Peanut]

This isn't really related to the article itself, but I'm not sure it's feasible to support a family of 6 on anything *other* than a single income, at least while the kids are young. Unless both spouses are significant wage earners, the childcare costs for 4 young kids would basically negate the second income entirely. The lower income earner is just working to pay for childcare required because they are working, which is pointless. Even a nanny is really quite expensive unless they live with you - but then that requires a level of house that is big enough to give the nanny their own room, bathroom, etc.

[FlamesAddiction]

Originally Posted by tvp2003

If you measure based on what society thinks, he's doing it wrong:
- No new cars
- No exotic trips
- No fancy dinners

Makes you sad to think how "happiness" is defined these days.

While I agree that people who actually have trouble getting by should not spend their money on those luxuries (those people are probably at the low end of "middle class" or way over extended themselves on credit), there is a large portion of the middle class that will never be able to afford a home for themselves or their family, but they can still afford those luxuries. It gives society a false sense of wealth. It's like saying that someone who can't afford a $60 steak dinner shouldn't be spending $1 on a piece of chocolate. When the meaningful things can't be attained, people will spend their money on the non-meaningful things.

[HelloHockeyFans]

The biggest problem these days are people's willingness to borrow money just because interest rates are low. You can bet people are vulnerable to financial shock when their credit cards are near their limits, their line of credits are being used to pay for things they don't need and they're basically living off borrowed money.

Essentially what Slava said earlier - people are living way above their means and buying everything from cars to houses to vacations when in reality, based on their income and debt, they can't afford it, but hey, it's 1% interest, who cares!

[Oil Stain]

Originally Posted by FlamesAddiction

While I agree that people who actually have trouble getting by should not spend their money on those luxuries (those people are probably at the low end of "middle class" or way over extended themselves on credit), there is a large portion of the middle class that will never be able to afford a home for themselves or their family, but they can still afford those luxuries. It gives society a false sense of wealth. It's like saying that someone who can't afford a $60 steak dinner shouldn't be spending $1 on a piece of chocolate. When the meaningful things can't be attained, people will spend their money on the non-meaningful things.

But home ownership is actually up from 60% to 69% since the 1970's.

[GGG]

Originally Posted by SebC

It shows, roughly, that the growth of real GDP is not creating benefits for the middle class, or the lower class - it's all being captured by the upper class.

I agree but that doesn't match what the thread title that the Canadian dream is a myth. It shows that the middle class is about as well off as they used to be.

[nik-]

Originally Posted by GGG

I agree but that doesn't match what the thread title that the Canadian dream is a myth. It shows that the middle class is about as well off as they used to be.

If you ignore purchasing power. This "constant dollar" is supposed to take it into account though.