The middle class in Canada is now more wealthy than in the United States, according to a new survey commissioned by the New York Times.
Conducted by the newspaper in conjunction with the data centre LIS, the study concludes that after-tax median income in the U.S. is now lower than in Canada, with Western European countries hot on America's tail.
The U.S. remains the richest country in the world on a per capita basis (at least according to the Times, there is debate on this). So while America is still the best country in the world to be rich, things are deteriorating for the middle class and are becoming even worse for the poor. Below-median incomes in the U.S. have long lagged those in other developed nations.
The story was published on the Times' new data journalism site The Upshot and quickly sparked a firestorm of reaction in Canada.
Employment Minister Jason Kenney fired off a series of tweets using the story to tout Canada's economic performance under the Conservative government. He also questioned why Justin Trudeau so often argues that the middle class is in crisis when the Times data suggests that Canada is doing well in comparison with other industrialized nations.
While Trudeau did not immediately respond to Kenney, the Times study is unlikely to alter the Liberal leader's focus on the middle class.
In February, a Statistics Canada survey was released that found median net worth has risen almost 80 per cent since 1999. When asked about the numbers, Trudeau said he looks at data as far back as 1981 and that the trend lines are "very troubling."
Trudeau cited a study from within Kenney's own department that found that middle class wages have stagnated while debts have increased between 1993 and 2007.
The picture is clearly complicated. One important factor in Canada's apparent success, at least on paper, has been rising housing prices. But Canadians have been taking on increased debt to fuel the real estate market and a change in interest rates could radically alter the picture in a short period of time.
While the eventual release of the entire data set used by the Times will undoubtedly lead to further debate, the story comes amid intense focus on the effect modern capitalism is having on income inequality.
The number-one book on Amazon at the moment is Thomas Piketty's "Capital in the Twenty-First Century". In it, the French economist argues that the reduction in inequality seen in the 20th century was an aberration from the capitalist norm. He posits that inequality will continue to expand unless major economies do something to stop it. Without measures such as a global tax on capital, Piketty believes the 21st century may look more like the 1800s.