As American as Poutine

There’s a lot of hubbub in Canada about income inequality in the sense that Canadian CEOs are making 25 times more than their average workers. This is in contrast to the 400 times more that the average American CEO makes in relation to Canadian CEOs.

One can argue that the issue of income inequality between countries is a matter of perspective. What I find in Canada however, is that the public’s tolerance for it is much lower than in the States. Here are some comparative examples that lead me to this conclusion:

First, the level of household debt is much different in Canada. While households have been deleveraging in the U.S., Canadians have been taking on more debt (but not too much), largely because they were one of the few economies not to be tanked in 2008:

household debt US canada

Also, the concept of “poverty” is different in Canada. The “poverty line” is much higher in Canada than the U.S.

Number of Persons in Household U.S. Poverty Line Canadian Poverty Line

1

$11,490 $18,421

2

$15,510 $22,420

3

$19,530 $27,918

4

$23,550 $34,829

Source: StatsCan and U.S. Census Bureau

Couple this with the Canadian minimum wage, which averages $10.25 per hour across provinces. That means a single person working minimum wage needs to work 35 hours per week to make the federal poverty line. Compare that to an American who needs to work almost 50 hours per week to make the same amount of money.

Unemployment in Canada has been tracking much lower than in the U.S., so there’s a much better jobs picture, even for minimum wage jobs:

Canada US U3

Also, Inflation in Canada has been tracking the same as the U.S., so with the exchange rates, things aren’t any more expensive in Canada comparatively.

US Canada CPI

Lastly, while child poverty rate increases in Canada will likely be an issue in the next federal election, the OECD child poverty rate of 15% in Canada is nothing compared to the 23% rate in the United States, which will NOT be an issue in U.S. elections.

So while a 25:1 ratio in CEO pay in Canada may not seem like much in comparison to 425:1 in the United States, the Canadian perspective is this: Canadians have a culture of more equality, in which they’ve gotten used to over time. It’s a social norm and value in Canadian Society, which typically reflects in Canadian elections. In the U.S. there is no perception of “equality” as a social norm. This makes the Canadian tolerance for inequality much lower.

In other words, Canadian concepts of class mobility and income equality are as American as Poutine, because those concepts under an American system are non-existent.

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This entry was posted in Labor, Poverty, Socioeconomics, Sociology. Bookmark the permalink.

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