Are you richer or poorer?

Despite rising house prices and the steady growth of household debt, middle-class Canadians have never been wealthier than they are today.

We often get the impression that the generation following the baby-boom generation is poorer than the boomers, who are widely associated with privilege and affluence. After all, when baby boomers were young, they could buy a car and a big house — on one salary.

If we look at average family income, the impression holds true. According to a recent University of Sherbrooke study, on average, Quebec families earn less now than they did in 1976. And there’s a good chance that similar findings are reflected in the rest of the country.

However, the concept of “family” is problematic: the typical family, or household, has changed considerably. For example, there are far more single-parent families now. In many cases, these households lower the average income and this “compositional effect” clouds the results.

The study’s research team defined the different types of families. It showed that contrary to popular belief, single-parent families, couple families, single people and even the elderly have a higher income, after taxes and transfers, than in 1976. If today’s “households” seem poorer than those of the 1970s, it’s simply because they are now made up of smaller cells.

A Statistics Canada study supports these findings, revealing that, when the consumer price index is taken into consideration, and after the sale of assets and debt repayment, the median net worth of Canadian families increased 44.5% between 2005 and 2012.

Is this further proof that Canadians are richer than they used to be? Indeed, but there’s a catch: our “wealth” in this case stems for the most part from the inordinate increase in housing prices nationwide and the stock market recovery since 2008. Some predict that these two bubbles will eventually burst, but household debt, which breaks records every day, will continue to rise.


Without a doubt, our purchasing power makes us richer, even though we sometimes feel that goods and services are more expensive. But if we flip through a 1956 Sears catalogue, we quickly see that everything is actually less expensive today.

  • An American manufacturing worker had to work one and a half weeks, or 61 hours, to purchase a 17-inch black-and-white television. Today, the same worker can purchase a 19-inch colour TV after 10 hours of labour.
  • The typical American had to work 79 hours, or two weeks, to buy an inexpensive washing machine for the family. Today, someone would have to work 15 hours to purchase the same appliance.

Many people feel they are struggling to make ends meet. However, our excessive consumption and growing needs — for a 60-inch TV, a hot tub, an annual trip to a warm destination — may explain this feeling. The truth is, middle-class workers have never been wealthier.