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Occupy Vancouver protesters need not worry; young Canadians can and will advance economically

Appeared in Business in Vancouver
Authors:
Release Date: November 15, 2011
With public opinion now turning on the protesters, we don’t know what the future holds for Occupy Vancouver. But looking beyond the multi-coloured tents, creatively captioned picket signs and sporadic chants, one concern shared by the protesters seems to be a perceived lack of opportunity for young Canadians. And you can’t blame them. We are, after all, bombarded by claims of stagnating incomes, a lack of opportunity not faced by previous generations, and, of course, the old cliché that the rich are getting richer while the poor stay poor.

But is there really a permanent divide between a privileged few (the 1%) and the rest of us (99%)? That is, are Canadians simply born into certain income groups in which they live their entire lives?

While the notion of being unable to shape one’s economic future can make a concerned citizen head to the art gallery in protest of society’s injustices, the reality is that with some hard work young Canadians can and will improve their lot in life.

Most young people start as low-income earners and work up to higher income over the course of their lives. Given their initial lack of experience, education and/or training, their incomes start out low but peak when they hit middle age (the prime earning years) and then taper off as they approach retirement.

Consider the experience of the authors of this piece – experience to which many Canadians can relate. We come from hard-working immigrant families. Not long ago, we were both low-income earners working part-time jobs to support ourselves through school. After completing our education and gaining skills and experience, we moved up the income ladder (although admittedly we’re still far from the highest earners in the population).

Canadians can relate to that because our experience is the norm. Over the last 15 years, more than a dozen Canadian studies have examined changes in income using data that tracks people’s income over time. Those studies have found that most Canadians (about 98%) transition from low income into higher income groups in a relatively short period of time.

For example, a 2001 Statistics Canada study examined data on low-income earners from 1993 to 1998. It found that 67% moved into a higher income group in a year’s time and 80% did so in two.

A more recent 2010 Statistics Canada study found the same results. It tracked low-income earners between 2002 and 2007 and found that 60% moved into a higher income group after one year, 79% did so after two and nearly 90% after six.

These findings are critical because they show that being a low-income earner is generally a temporary experience and a stepping stone to better-paid employment.

Not only are individual Canadians financially mobile throughout their lifetimes, but also a growing body of research shows that Canadian families are also financially mobile over generations.

Several studies, most of which are published by Statistics Canada, have uncovered a surprisingly high level of “intergenerational mobility” – the finding that a Canadian child’s future economic success is not strongly linked to the financial position of his or her parents.

In 2006, Miles Corak, a University of Ottawa economics professor, measured intergenerational mobility in nine highly developed countries and found that Canada is one of the most intergenerationally mobile societies in the developed world; a conclusion that is consistent with Organization for Economic Co-operation and Development (OECD) research.

We’re lucky to live in a dynamic society where the ability to move up the income ranks is a reality for most Canadians. While we sympathize with Occupy protesters, many of which are young, the evidence shows that for these young people the Canadian dream is still within reach.


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