Trudeau likes to point out that Medium wages have been stagnant for over 30 years. This is just as true of Canada as it is of the US. A 2008 study by Sharpe, Arsenault and Harrison is typical. They found that inflation adjusted median income had jumped $53 dollars, from $41,348
(2005 dollars) in 1980 to $41,401 in 2005. http://www.csls.ca/notes/ Note2009-2.pdf Fairness aside (productivity has gone up by nearly 40% since then), Trudeau never identifies why this is a pressing issue rather than an annoyance. After all, it would appear that the kids are alright. Your average worker is doing just as well as his 1980 counterpart. As a result, Trudeau’s remedies seem unconvincing and somewhat half baked. For example, I recently attended a Liberal event in which the evening’s speaker, Kevin Evans, outlined the skills gap that he contended currently plagues Canada. The only problem is there is no evidence whatsoever that an such skills gap exists. This was pointed out recently by former Bank of Canada head Don Drummond and by the Parliamentary Budget Officer. You can read the later’s report here. http://www.pbo-dpb.gc.ca/ files/files/Labour_Note_EN.pdf
What Trudeau needs to talk about is the soaring costs of post secondary education. In Ontario average fees, in current dollars, have increased from $1,464 in 1990-91 to $6,348 in 2012-13. http://www.cbc.ca/news/ canada/university-tuition- rising-to-record-levels-in- canada-1.1699103 He needs to talk about the high cost of child care. In Vancouver it is $1200 a month. http://www.theglobeandmail.com/news/national/by-the-numbers-how-much-does-daycare-really-cost-in-canada/article15006208/ Most important of all, he needs to talk about the high cost of housing, particularly in Vancouver and Toronto. In Vancouver the average home listing on MLS in 2000 was around $300,000. A decade later is was over $800,000. http://www.rbc.com/ economics/economic-reports/ pdf/other-reports/ vancouverhouse.pdf In the long term the ever increasing costs of education, coupled with sky high cost of housing will ultimately worsen the coming demographic crush. Canadian couples can not afford to have too many kids full stop. However, for those that can afford them, the point at which they can afford them is getting later and later in life. Indeed, more babies in Canada are born to women over 30 than under. Incidentally, the two provinces where women wait the longest to have kids, viz., Ontario and BC, also have the most expensive real estate. In 2010, 56.2% of Ontario babies were born to women over 30 and 55.7% of BC babies were born to women over 30. http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=75 The Canadian average is 51.2. In summary, the medium wage might have kept up with inflation, but increasingly life’s necessities and big ticket items are ever more expensive. Once he has sketched out the issue, Trudeau needs to come up with solutions that address these soaring costs. All the tax credits and tax cuts in the world are not going to do the trick. As RBC pointed out, "A typical Vancouver-area homebuyers would need to allocate 92% of their income to carry the costs of a two-storey home".
Although her work focused on the US, the work of Elizabeth Warren is a great place to start. Even before the 2008 downturn Warren pointed just how much pressure the middle class was under. She pointed out that Americans are spending ever less on discretionary items and not more. Indeed, compared the spending habits of a 1970 family of 4 to a the spending habits of a 2003 American family of 4. http://www.youtube.com/watch?v=akVL7QY0S8A&noredirect=1 The 2003 family spent 32% less on clothes 18% less on food and eating out 52% less on appliances 24% less on a car 76% more for a mortgage on a 6.1 room house than the 1970 family paid for mortgage on a 5.8 room house. 74% more percent for employer sponsored health care 52% more for transportation (more cars and more travel time) 100% more for childcare 25% more for taxes (more two income families meant more taxable income.) The 2003 family kept cars two years longer, took 33% less vacations and was significantly more likely to live in a home older than 25 years old. The 2003 family devoted 75% of their income to housing, taxes, health care and child care and transportation. The 1970 family devoted 50%. Despite a large increase in family income between 1970 and 2003 (there was a huge increase in the number of two income families) the 1970 family had more money for discretionary spending and savings. Sky rocketing college tuition should also be factored in. Not only has tuition costs gone up 231% since 1970, college education is deemed necessary in ways it was not before. As Elizabeth Warren points out, more people believe the moon landing was fake than believe a university education is not needed for entrance into the middle class. Of course, a huge increase in the above mentioned areas only tells part of the story. American families are much more vulnerable today for other reasons as well. Not only has the savings rate declined from 11% in 1970 to below zero in 2001, the number of families that depend upon two incomes in order to make ends meat has skyrocketed. These familers are vulnerable if either partner looses gainful employment. There is no one there to step into the void if one of partner goes down. To make matters worse the social safety net is not as wide as it once was. This is especially so when it comes to health care. Whereas the average uninsured person in 1970 was a 23 year old male with no children (in other words someone who choose not to have health insurance), the average uninsured person in 2003 was 35 year old married parent of two. It is not just the poor that vulnerable either. In 2001 1.4 million lost their health insurance. Of those, 800,000 earned more than $75,000 a year. It is no wonder the bankruptcy rates have skyrocketed. Since the late 1990s an American married couple with children is more likely to declare bankruptcy than to file for divorce. 90% of those filing for bankruptcy do so for 1 of 3 reasons, viz., an illness in the family, family breakup or job loss.