Canada's Middle Class Surpasses US During Obama's Tenure

Wednesday, 23 Apr 2014 10:14 AM

By Michael Mullins

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Canada's middle class has surpassed its counterpart in the United States during President Barack Obama's term-and-a-half tenure, according to the numbers in a New York Times study 35 years in the making.

The Times study released this week finds that America's poor and middle class have fallen behind their economic peers in other Western nations despite the fact that U.S. economic growth has either matched or exceeded that of many other countries over the past 3-plus decades. At the same time, the richest among us "are outpacing many of their global peers," The Times' study finds.

In 2000 the after-tax income of the Canada's middle-class was significantly less than that of the United States, but the neighbor to the north has seen its median income increase significantly over the preceding decade while the median U.S. income remained relatively stagnant during the same time period. The result was that by 2010, during Obama's first term, the median incomes for both countries were equal to one another.

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The Times estimated that over the past 3-plus years the Canadian middle class income has since surpassed that of the U.S. middle class. As much as the American middle class is suffering, the nation's poor are apparently suffering even more.

"The struggles of the poor in the United States are even starker than those of the middle class," The Times writes. "A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true."

So why is the U.S. falling behind other Western nations?

According to The Times' analysis there are three factors that account for the weak U.S. performance.

The No. 1 factor is education. Over the past three decades U.S. education levels have lagged behind those of other industrialized nations resulting in the U.S. economy having difficulty maintaining highly skilled, well-paying jobs.

The No. 2 factor is distribution of wealth. As previously mentioned, the poor and middle class in America have been enjoying an increasingly smaller share of profits earned by companies, who pay their executives significantly more than their counterparts are paid in other countries.

The No. 3 factor for the increasing disparity between the U.S. middle class and other developed nations, according to The Times, is that the "governments in Canada and Western Europe take more aggressive steps to raise the take-home pay of low- and middle-income households by redistributing income."

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