Social Policy in Ontario

Wait. What if we’re not actually worse off than our parents?

Posted on May 24, 2017 in Debates

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TheGlobeandMail.com – Opinion/Editorials
May 23, 2017.   GLOBE EDITORIAL

A popular complaint from most any adult who is not a baby boomer goes something like this: I am destined to be worse off financially than my parents.

Except, Statistics Canada has just published a study indicating the narrative doesn’t match the facts.

Using a database of revenue statistics from 1978-2014 that links the income of Canadians to that of their children, the agency concluded that absolute income mobility has remained fairly stable in the past four decades.

In other words, people who were born between 1970 and 1984 – Generation X and the first tranche of millennials – exceed their parents’ adjusted family income through their mid-career years in roughly the same proportions as the boomers did.

What does any of this mean? It is just one study, with inherent methodological limitations, so the usual caveats are in order.

Consider, however, that large swaths of the political debate over the past decade have focused on income inequality.

In turn, the income gap is linked to the financial advantages (or disadvantages) passed from parent to child. University of Ottawa labour economist Miles Corak described it thusly in a 2013 paper: “Inequality lowers mobility because it shapes opportunity.”

Income inequality is a real thing. So is income stagnation; in many Western economies, the problem is exemplified by a squeezed and shrinking middle class.

It’s no accident the Trudeau government’s middle-class fascination – some might say obsession – is the lens through which it views most social and economic policy.

But while Canada’s middle-income earners still face their share of challenges, by many measures they are holding up well relative to a decade or two ago. This is doubly true when compared to the U.S.

That new evidence suggests that today’s thirty- and forty-somethings, who form the bulk of Canada’s work force, aren’t appreciably poorer than their parents (at least not yet) serves to emphasize the point.

More than anything, the study should remind us that it’s useful to be skeptical of conventional wisdom and government storylines. To fix a problem, it must first be diagnosed correctly.

https://www.theglobeandmail.com/opinion/editorials/wait-what-if-were-not-actually-worse-off-than-our-parents/article35092470/

Tags: economy, featured, participation, standard of living

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