The American Middle Class, long considered to be the wealthiest in the world, is no longer the World’s Richest.
While it is still wealthier than corresponding demographics in Europe, it has indeed fallen behind Canada’s middle class.
How did US lose that lead? According to The Atlantic there are three broad reasons:
1) Canada's education attainment is outpacing the U.S. and most of the world
2) American middle-class market wages aren't keeping up with overall economic growth
3) Other governments are doing more to redistribute income to poorer families in other countries, particularly in western and northern Europe.
The New York Times, citing an analysis of data going back 35, reports that median income in the U.S., about $74,000 after taxes for a family of four, rose by 20% between 1980 and 2000 but the Median income in Canada, in contrast, rose by 20% between 2000 and 2010 alone.
Lawrence Katz, a Harvard economist says, “The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,”
“In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer. That is no longer the case,” the Professor adds.
Wealthy Americans, of course, still hold the top position.
Employment Minister Jason Kenney took to Twitter to trumpet the new findings.
"Canada is officially home to the richest middle class on the planet," he retweeted and added, "If Justin Trudeau is interested in evidence-based policy on the middle class, he should read this."
While Canadian median income has caught up, the 95th percentile Americans still make 20 per cent more than their northern counterparts with annual after-tax income of US$58,600 per person.