Fraser Forum

Actually, Canada has a great deal of economic mobility

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Is Canada no longer a place where people can improve their economic standing through the pursuit of education, skills development and hard work?

That’s certainly the impression some would have us believe.

For example, the recent federal budget paints a gloomy picture with excerpts such as:

For generations, Canadians worked hard, secure in the belief that their hard work would be rewarded. They trusted that in exchange for their honest efforts, they would realize greater opportunities for themselves, and for their families.

The budget goes on to suggest times have changed, as “Canadians are questioning whether the promise of progress has passed.”

This sounds like economic mobility is a thing of the past.

In reality, however, Canada is a place where people can advance economically and in particular, where those in the lowest income group can rise up the income ladder over the course of their lives.

In a recent study, we used Statistics Canada data to follow a sample of a million Canadians to see how their incomes change over time. The study put individual Canadians into five income groups (from lowest to highest) with each group comprising 20 per cent of the total. It then tracked the movement of people between income groups after five, 10 and 19 years.

The results are uplifting, especially when it comes to the lowest income group.

Within the span of a decade, nine of every 10 Canadians (88 per cent) who started out in the lowest income group moved up to higher income groups.

Upward mobility is even more pronounced as time progresses. After 19 years, one of every four Canadians (24 per cent) who began in the lowest income group reached the very top income group.

The data show it’s not only possible for Canadians to work their way up the income ladder, but it’s actually the norm.

Indeed, most Canadians typically start off working low-paying jobs when they’re young, in school, and have little work and life experience. After finishing college, university or other training, high pay isn’t guaranteed, but with hard work and skills development, earnings increase over time as people receive promotions or switch jobs. Earnings generally peak in middle-age before tapering off as retirement nears.

Despite the pessimistic view portrayed by the federal government and others, Canada is a place where people can improve their lot in life by completing (and continuing) their education, acquiring job skills, and gaining work and life experience. Over time, they will naturally move up the income ladder as their circumstances change.

We should recognize and celebrate the high degree of economic mobility in Canada. The focus of the public policy debate should be about how to protect and expand mobility rather than stoking fears of a problem that doesn’t exist.

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