Canada

Canadian Incomes Declined For The First Time In Four Years

Canadian Incomes Declined For The First Time In Four Years

Canadian incomes are on the decline, just not for everyone. The latest survey release from Statistics Canada delivers numbers on after-tax income… for 2015. The relatively slow update gives us some new  insights on what you already probably know, Canadians are experiencing increased income polarization. The number of Canadians earning over six-figures has steadily increased, but so has the number of people barely scraping by.

Median Income Dropped

The median income dropped slightly, but it still dropped. According to the survey, 2015 gross incomes fell to $56,000, a 0.35% decrease from the same time last year. These numbers were adjusted to 2015 dollars, so this already takes CPI (not inflation) into account. A declining median income is a worrisome trend. It means the number of Canadians earning less than the median is growing faster than those above it. This likely indicates less upward mobility for lower income Canadians.

Constant 2015 Dollars. Source: Statistics Canada.

More Than 1 In 5 Canadians Are Bringing Home Over $100k

Declining incomes weren’t experienced by all Canadians, far from it actually. In 2015, 21.3% brought home more than $100k in gross pay, a 1.9% increase from the year prior. Breaking that down, the percent of people bringing home between $100k – $149k stayed flat at 14.2%. Meanwhile, the number of Canadians that made over $150k increased a massive 5.9%, to 7.1%. The country’s highest earners apparently had no problem earning even more.

Constant 2015 Dollars. Source: Statistics Canada.

Increasing Percent of Lower Income Canadians

Two of the largest increases in pay scale were observed in the two lowest brackets, under $10k, and between $10k – $20k. Under $10k was the fastest growing segment year over year, experiencing a massive 7.14% increase. This brings the total number of working Canadians to 4.5%, still a relatively small category. $10k – $20k also showed significant growth, with a 4.59% increase. This brings the total number of people in this category to 9.1% of Canadians. While the total number of people in these categories remains relatively small, it is a disturbing trend to see growing in 2015.

Declining Middle Class

These stats showed an increased polarization of income, resulting in a smaller middle class. Breaking down the numbers into $10,000 increments, all categories between $30k to $100k experienced decline, the exception being $70k – $80k. The $70k – $80k range experienced a 2.98% increase, and now represents 6.9% of Canadians. Middle-class polarization continued to occur.

The latest Statistics Canada release is income from two years ago, so the fallout in 2016 is already felt – just not measured. Over the past 20 years, only one decline of median income was followed by an increase. It would be a big surprise if 2016 showed better numbers.

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