Academics reveal extent of hollowing out of Canadian middle class
This month's edition of Labour Market Matters looks at a topic of great concern to many Canadians: earnings of the middle class and the growth of high-skill and low-skill jobs.
The online publication, which is created by the Canadian Labour Market and Skills Researcher Network, highlights the research of UBC economist David Green and York University's Benjamin Sand.
In a 2013 research paper, they looked at how wage inequality, employment, and wage polarization have evolved over the last four decades in Canada.
The lowest 10 percent of wage earners saw a drop of about five percent whereas the top 10 percent experienced an increase of approximately 15 percent.
"The causes and consequences of these shifts in the occupation structure have attracted the attention of policy makers and economists alike, particularly in light of the most recent recession in which many more blue- and white-collar, middle-paying jobs were shed relative to professional jobs and jobs in the service sector (Economist, 2010)," they wrote. "The loss of good jobs with wages that could provide ﬁnancial security for less educated workers raises the spectre of an increasingly unequal society. Moreover, the loss of those jobs could have spill-over eﬀects that imply further wage declines in low-end, service sector jobs (Beaudry, Green, and Sand (2012))."
Employment growth at the top end of the wage range appeared to have "stalled" after 2000.
Green and Sand also concluded that wages fell for low-end workers compared to middle-income earners, and for middle-income earners compared to those at the top end.
The other paper by Charles Beach of Queen's University looked at the distributional shifts of middle-class earnings in Canada between 1970 and 2005.
He found that there has been a "marked decline of full-time full-year middle-class workers", as well as "an even larger shift in earnings with middle-class workers losing out to strong earnings gains of higher-earning workers".
This has occurred as there's been an increase in the numbers at the higher end and lower end of the wage spectrum.
The proportion of full-time full-year middle-income earners fell from 74.3 to 63.1 percent of the workforce between 1970 and 2005.
The higher earners working full-time over the year increased by 3.4 percent for males and 4.9 percent for females; among low earners working full-time over the year, they increased by 5.1 percent among males and 5.7 percent among females.