Canada’s middle class: Tories can celebrate surprising report, for now

David T Jones
Canada’s middle class: Tories can celebrate surprising report, for now

“You’re number one,” a New York Times study of global middle classes tells Canada.

“No we’re not,” Canadian opposition party rebut. “And if we are, the USA is to blame for not recovering more quickly from the Great Recession.”

For Americans, to the extent that citizens other than NYT subscribers absorbed it, the news of our second-rate middle class was a disconcerting reinforcement of Great Recession realities. Polls continue to demonstrate citizens’ belief that we are still in recession (despite technical statistics to the contrary); unemployment remains stubbornly high, and its actual level is somewhat concealed by the “discouraged worker” syndrome where individuals have been out of work so long, they are not seeking jobs and thus (rather perversely) are not counted as unemployed. Concurrently, the “underemployed” have jobs significantly beneath their ostensible skill levels or are not working as many hours as they desire.

It is no compensation that our upper class continues in first place globally. Indeed, that status simply sharpens a growing level of malicious envy over the real and perceived income gap between the upper 5 per cent and the rest of the population. And U.S. political reality is that the Democratic Party hopes to use “income inequality” as a cudgel against prosperous Republicans in the 2014 election to thwart their prospects of seizing control of Congress.

Thus, for Americans, the Canadian reaction is either bewildering or amusing.

Is this a reversion to the long-standing sneer that “Canadians go for the bronze?” That Canadians are uncomfortable with being in first place for fear that more will be expected of them?

But more likely, the Liberal-NDP reaction is political.

The Canadian response demonstrates the often tiresome but virtually universal position taken by opposition parties in democracies. That is, nothing the government ever does is good. Or if it is good, it isn’t sufficient. Or if it is sufficient for “A,” the government should have concentrated on “B” — and should do so immediately.

Such an attitude is directed both at the policies and the personalities implementing them. To wit, the late Finance Minister Jim Flaherty was, as depicted in the opposition media during his tenure as finance minister, invariably wrong, misguided, economically destructive, etc. Dead, however, it turns out that he was a prince of a guy: intelligent, amusing, engaging, self-deprecating. Too bad he didn’t live to hear the encomiums.

The report, however, is indeed good news for Tories. Regardless of its caveats — including recent substantial U.S. economic recovery and the counting rule that didn’t include employer-paid health insurance in U.S. worker income — the status of “first in the world” for Canada’s middle class reinforces the basic themes of the Harper Conservatives, and provides a touchstone for the 2015 federal election. To wit, the Tories are successfully following economic policies that not only adroitly navigated the tempests of the Great Recession but have substantially increased Canadian middle class income (up 20 percent in real terms between 2000 and 2010). So when they offer more-of-the-same in terms of tax reduction, expenditure cuts, and specific benefits for narrow slices of the middle class electorate, they can plausibly contend that their prescriptions have worked, and they are the good stewards of the Canadian economy.

The NDP and Liberals are reduced to contending that (a) they can do the job better; (b) the Canadian middle class isn’t advancing as quickly as it should (versus the “poor” and the “upper class”); (c) the real problem is income inequality and “the rich” should be taxed more heavily; (d) Canada’s No. 1 status is a chimera that will quickly be erased once the United States gets its economy back in gear or the drivers for the Canadian economy (housing, resource prices) collapse.

[ More DvsD: It's time to pull the plug on taxpayer-funded broadcasters ]

Or they can hope that even if the NYT assessments are correct, Canadians will feel confident enough of their economic future to take a flyer with Justin Trudeau or Thomas Mulcair.

Defining the “middle class” is akin to painting moving trains. Everyone wants to be “middle class” (even ostensibly “rich”). Various reports stretch it like a bungee cord ranging from between 25 to 66 percent of households. A recent Washington Post article discussed a family with a $90,000 income as “middle class” — noting that they were living “paycheck to paycheck.”

What we are seeing in Western society, primarily the United States and Canada — is malaise regarding economic futures. We don’t feel secure and hence disbelieve good news.

But Canadians shouldn’t obsess over a “one time” report. The U.S. will soon be back, and Canada can revert to comfortable second-class status.

David T. Jones is a retired State Department Senior Foreign Service Career Officer who has published several hundred books, articles, columns, and reviews on U.S. - Canadian bilateral issues and general foreign policy. During a career that spanned over 30 years, he concentrated on politico-military issues, serving as advisor for two Army Chiefs of Staff. He has just published Alternative North Americas: What Canada and the United States Can Learn from Each Other.