Whenever we consider the pros and cons of a new policy, we want to know if it benefits or hurts the poor, the middle class and those who are better off. Often, the answer depends on how we define each of these groups.
It’s said that 99 per cent of Canadians think of themselves as middle class, regardless of their income. But as our incomes grow increasingly unequal, it’s becoming more important to revisit the actual distribution of incomes in Canada and B.C. and come up with an evidence-based definition of middle income.
I looked at the distribution of total incomes (including all government transfers, such as EI, welfare, GST credits, etc., but no taxes) for economic families of 2 and more persons and propose the following break-down according to quintiles. The data is for 2009 (latest available).
So, a broad definition of the middle class in Canada (and B.C.) would include those with family incomes between $40,000 and $125,000. This income range spans substantial differences in standards of living and levels of economic security. With growing income inequality, it’s becoming harder and harder to think of a unified middle class experience.
For example, if a policy benefits those with incomes $90 – $125,000 but does little for those with incomes under $70,000, like much of the Conservative government’s existing and proposed tax cuts, can we still say it favours the middle class?
The latest Statistics Canada release of income data for families makes all data tables available for free through CANSIM so you can double-check these or make calculations for your province using Table 202-0401.
This article was first posted on The Progressive Economics Forum.