A study by the New York Times has found that Canada’s middle class is now more affluent than the United States. After a decade of growth, Canada’s middle class has surpassed the middle class in the United States, becoming the most affluent in the world. Indeed, while incomes for the middle class have stagnated and even begun to decline in the United States, they have risen sharply in Canada.


Up until recently, the American middle class has long been the most affluent in the world. The international economy has been driven in large part by demand from American consumers. For example, Asia has enjoyed a long and sustained boom over the last 20 years, but that economic expansion relied heavily on exports to the United States.

Income growth mixed across the world

The New York Times recently commissioned a study to compare income levels over time among households in various countries. The study looked at income levels for various groups and focused on median per capita income. If a country had a median income of $15,000 dollars per household, this would mean that a family of four would have a median income of $60,000.

The study put earnings into today’s dollars and adjusted for inflation. Income for America’s middle class has stagnated over the last 10 years and even begun to decline in the last few years. Still, middle class income is up 20 percent since 1980.

America losing ground to peers

Median incomes in the United States now average $18,700 dollars person, representing a 20% bump since 1980. Over the last ten years, however, incomes have all but stagnated for median income earners.

Just 10 years ago, median incomes in Canada lagged far behind the United States. Through the 2000’s, however, and even in spite of the Great Recession, median incomes rapidly rose and as of 2012 matched the United States. Researchers believe that Canadian incomes have since surpassed the United States.

The United Kingdom is also rapidly catching up. Back in 1980 the UK lagged far behind the United States, with median incomes falling below $10,000 dollars back in 1980. Now, they have surged to about $15,000 dollars. Germany, on the other hand, has seen wages grow at a much slower clip, especially over the last few years.

Middle classes in other countries, such as Norway and the Netherlands, are quickly catching up to Americans. Given the on-going trends, the United States could see itself fall even further down the list in the years to come.

Top one percent earning plenty

The United States economy has actually grown at a faster rate than many of its European peers and at pace with Canada. The benefits of this economic growth, however, has largely been concentrated in the hands of the top ten percent of income earners. Last year, America’s best performing 10 percent managed to rake in about 48 percent of total income earnings.

The top one percent has been doing especially well. Last year, the top one percent accounted for nearly 20 percent of all income earnings. In 2012, incomes among the top one percent rose by as much as 20 percent, while the other 99 percent saw their incomes rise only one percent.

Such wide gaps in income could eventually lead to social instability. Numerous studies and scholars have pointed to high disparities as one of the principle drivers for unrest and instability. A recent NASA study even argued that growing inequality could lead to the collapse of human civilization in the coming decades.

The growing income gap in the United States could eventually lead to increasing unrest and instability. Shrinking and stagnant incomes could also lead to declining economic growth as people will have less and less to spend. With consumer consumption making up such a huge portion of the economy, the effects could be dramatic.