
Most Canadians Are Now Better Off Than Most Americans - pseudolus
https://www.bloomberg.com/opinion/articles/2019-08-29/america-s-middle-class-is-losing-ground-to-canada-s
======
refurb
Canadians have been gorging themselves on debt for the past decade. Far higher
than other OCED countries. That's left them in a very precarious situation.[1]

[1][https://www.cnbc.com/2017/11/24/canadas-household-debt-
level...](https://www.cnbc.com/2017/11/24/canadas-household-debt-levels-
higher-than-any-other-country-report-says.html)

~~~
vkou
They've been going into debt in order to buy housing, not on other forms of
consumer spending or 'living beyond their means'.

Who sells them housing? Other Canadians.

Why do they go into so much debt? Because the nature of housing is that rising
prices will squeeze out every last cent of saved money from the pockets of
people trying to buy their first house.

It boggles my mind that the average house in Vancouver or Toronto costs ~20
years of average wages (Assuming you don't eat, sleep under a bridge, and
don't pay any taxes.)

20 years worth of labour sure as hell did not go into building it. It's all
land speculation.

~~~
fujiters
At some point, it's a better financial move to rent instead of own. That is
true in many American cities (much of NYC, for example). Housing bubbles
happen. Try not to buy into one.

~~~
vkou
This advice sounds just as great today as it did in Vancouver, 15 years ago.

In the meantime, inflation-adjusted housing prices more than doubled. Pretty
much everyone and everyone would have been better off not following your
advice.

And today, in 2019 there is still no clear transition path out of the current
horrorshow that is the property market. Prices are not coming down, nobody
sees any mechanism by which they might come down, and too many people have too
much invested in land for the government to ever encourage prices to come
down.

When you rent, you are seriously gambling that property prices will not keep
rising. When you own, you are seriously gambling that property prices will not
fall.

The thing is, there are enormous political and economic pressures to create
policies that prevent property prices from falling. As a renter, you are
placing a bet against these incredibly powerful forces. It doesn't even matter
if you're right - the markets may remain irrational longer than you can remain
solvent.

Edit: Obviously there are complications to this. Buying and selling a house is
stressful, time-intensive, and expensive. If you're only going to be in an
area for 5 years, it's not as smart an idea as buying one with the intent to
stay for 45 years. Obviously, it's possible that a generational shift in
demographics will result in a property crash... But it's just as likely that
increased immigration will offset that shift. Obviously, your city's financial
situation, and likely future changes to property taxes will have an effect...
The list goes on.

~~~
fujiters
If things get seriously unaffordable as a renter, it's always possible to move
somewhere more affordable.

Housing, on average, rises at the rate of inflation (it's closely linked to
the cost of new construction), per Robert Shiller's research. Even if the
housing market explodes in one area, there's almost certainly another area
where it hasn't (normally one without restrictions on new construction-San
Fransisco being a prime example of a place where housing prices have
skyrocketed due to such restrictions).

~~~
vkou
Affordable places don't have jobs. This is not a trend that's reversing
anytime soon.

> Housing, on average, rises at the rate of inflation

I don't care about the price of the average house in the country. I care about
the price of a house within a commuting distance of where I can find gainful
employment.

Right now, the prices of homes in those areas are skyrocketing, while the
prices of homes in areas that don't have gainful employment are nosediving.
Take the average, and you'll find that it tracks inflation... And is a
worthless metric.

> Even if the housing market explodes in one area, there's almost certainly
> another area where it hasn't

Yes, and none of those areas are ones where young people can make a living.

The socially optimal thing would of course be for retirees to consider selling
their million-dollar coastal metro homes and move to cheaper areas, like the
interior. But as long as they have access to HELOCs, they don't feel any
pressure to do them. They can just borrow money against their million-dollar
home, instead of downsizing. This is also not going anywhere. It would be
political suicide to force grandma and grandpa to move to the boonies, just so
that their grandkids, who need to work in the city could afford to live in it.

~~~
fujiters
Perhaps grandkids should ask to move in with grandma? She might like the
company. :)

In seriousness, not all metro areas have seen the same huge rise in rents and
property values. I can personally vouch that the Baltimore-DC region offers
relatively high paying jobs and housing that is adorable given those incomes.
I've heard San Antonio, TX is also good on the jobs to housing costs front.

~~~
vkou
Neither Baltimore or San Antonio are in Canada.

~~~
fujiters
Montreal and Quebec City seem reasonable, but this is based purely on a few
web searches.

I hope you end up in a place where you can start building some financial
security.

Also, run the numbers on long term renting in areas where housing prices are
high. There's sometimes a high opportunity cost to having a ton of your
savings stuck in the down payment for a house when you could otherwise have it
invested in low cost index funds or something similar.

------
neplus
I was born and raised in Canada. I, like many of my peers at the "top"
Canadian universities, focused solely on recruiting to the "top" American
companies that came to campus to recruit[1].

I would describe Canada as generally being tightly range bound. One of the
most striking things about coming to the U.S. is the large class of what I
would consider to be the working poor. People who are truly just doing enough
to get by and are one mishap away from financial ruin. Of course, having lived
in SF and NYC this is constantly juxtaposed with extreme, incomprehensible
wealth that is equally striking.

In Canada, in my experience, the vast majority are still in the middle with
few outliers in either direction. Earning potentials are significantly capped
- even in areas like banking and tech - and social programs make it quite
difficult for there to be the kind of working poor I observe daily here.

I've often thought to myself that I couldn't imagine what it would be like to
make $50k in the United States (even living in a low CoL area). From health
insurance, to private school costs (given the quality of many public schools),
to college costs. It would seem an intense burden. Certainly if I had offers
that paid between $50-100k in both the U.S. and Canada I would move back to
Canada. I would feel I have no other choice.

With all that said, I make many multiples - especially after tax - of what I
could ever have hoped to make in Canada. I have been inside institutions with
the kind of institutional framework with no comparable in Canada (from a human
capital and technological perspective). Opportunities have been afforded to me
here that either do not exist or are analogous, but significantly inferior in
Canada. The United States has given me a wonderful life and I'll always be
grateful for the opportunity to be here.

I make no claim as to which economic system is better. I would just observe
that Canada is a much easier place to live, but in my experience lacking in
the kind of dynamism you see in the United States (that translates into
personal opportunities, income, and fulfilment).

[1] Top is obviously somewhat subjective. McGill, U of T, UBC, and U of
Waterloo would be the "top" schools. The "top" jobs are FANG or FANG-adjacent,
investment banks or hedge funds (GS, JPM, Citadel, etc.), and consulting firms
(McKinsey, BCG, Bain).

~~~
rayiner
> I've often thought to myself that I couldn't imagine what it would be like
> to make $50k in the United States (even living in a low CoL area). From
> health insurance, to private school costs (given the quality of many public
> schools), to college costs. It would seem an intense burden. Certainly if I
> had offers that paid between $50-100k in both the U.S. and Canada I would
> move back to Canada. I would feel I have no other choice.

I wonder how much of this perception comes from the fact that people who have
lived in both Canada and the U.S. probably lived in places like SF and NYC,
and those American cities are particularly dysfunctional. And that
dysfunctionality is particularly visible because of differences in housing
patterns. (Toronto versus Chicago is a good example. The two cities are the
same size, but Toronto's metro area has 6.5 million people, while Chicago's
has almost 10 million. If housing patterns were similar, Chicago would have
another 1.5-2 million middle class people living in the city, lessening the
impression of gaping wealth inequality between the city's various
neighborhoods.)

The fact is that Canada spends almost exactly the same percentage of GDP on
social welfare as the U.S., and slightly less per student on K-12 education.
It's hard to imagine that Canada really manages to get a dramatically
different safety net for the same money. More likely to me is that U.S.
urbanites have little experience with American families in suburban Georgia or
Kansas--places where making $50,000 and getting employer-paid health insurance
(like most middle class families get), and sending your kids to the perfectly
good neighborhood school makes for a quite comfortable life.

~~~
neplus
I have thought about this quite a bit and tried to word my initial post as a
personal statement (not an objective fact of the inferiority of making $50k in
Kansas as opposed to Quebec).

I entirely agree with your point that American families in Kansas, et al. seem
reasonably content and the kind of fears that would lead me to look to Canada
over the U.S. if I made $50-100k are perhaps entirely irrational.

My response though - again personal in nature, not objective in any sense -
would be:

Canadians grew up in Canada with an imperfect healthcare system. Nevertheless,
it's there and assessable whenever it is needed. There's no fear of random
bills or imperfect coverage (there is a fear of waiting weeks or months,
however, which is perhaps more important).

Canadian immigrants only understand the U.S. healthcare system in the abstract
-- so losing your health insurance or having it and getting dinged with a
large bill is a bit of a boogeyman (scary, but perhaps only because we don't
fully understand how it all works in practice).

Likewise K-12 and college in Canada is a much simpler affair. I grew up in a
city of 100,000. We had no private schools so everyone went to K-12 together.
When it came time to go to university, my top-ranked school (in Canada) cost
$7,000 a year and was quite easy to get into.

So for a middle-class Canadian family the notion of setting up your child to
have the very best Canadian education available isn't an overly stressful
affair. K-12 is public and college is reasonably affordable with reasonably
high acceptance rates. Importantly: even if private K-12 is available, it's
not overly difficult to get into McGill, et al. so why bother?

For a middle-class American family - because private K-12 is available and
likely helps with getting into the best colleges - you feel somewhat compelled
to send your child there (lest you do them a disservice). Then - again because
elite colleges are available and better than privates - you feel compelled to
help your child get into and pay for an elite, private education (even the top
public options are quite pricey).

In reality what America provides is better alternatives. An issue I see with
many colleagues with children is spending $10k a year on private K-12, but
feeling like a bad parent because they can't afford the $30k option that has
superior outcomes (a classic urban insecurity that is likely not entirely
rational). In Canada there are few choices (or in health care only one choice)
and while they are inferior to American comparables, they are much more widely
assessable. You send your child to the public K-12, because that's just what's
available. Your child has just one healthcare option. Your child can only pick
from four "elite" universities and if she or he applies to them all, will
likely get into one (at a reasonable cost).

It's all the paradox of choice, I suppose.

~~~
rayiner
This paradox of choice largely doesn't exist in the US either. The majority of
people in both countries didn't graduate college. For almost everyone, the
elite universities aren't even on the radar (much less the elite employers
like FANG into which those universities feed). This upper middle class
striverism is over-reported in the media, but is irrelevant to the vast
majority of Americans.

My wife went to high school in rural Iowa. Everyone went to the local high
school, and then the smart kids went to U of Iowa, the next tranche went to
Iowa State, etc. Her parents were "rich" (her step-dad is a surgeon) but there
wasn't much in the way to distinguish them from everyone else. Other “rich”
families owned farms, a couple of stores in town, etc. She did FFA (Future
Farmers of America) and worked her way through college babysitting. (Tuition
at U of I is $8,500 today, about the same as University of Toronto or McGill.)

I should add, in Iowa under 10% of people are below the poverty line, about
the same as Canada, infant mortality rate is about the same as Canada, the
homelessness rate is 1/10 what it is in Canada, 94% of the population is
covered by health insurance, etc. I just got back from Des Moines. Talk about
a prosperous, broadly middle class society. The child poverty rate in Des
Moines is 14% versus 25% for Toronto. There are no FANG jobs, but millennials
with completely normal colleges-graduate jobs own houses. If you want to know
why many Americans don’t view their country as a loaf-apocalyptic wasteland,
it’s because they don’t live in New York or San Francisco.

~~~
imposterr
*if you're straight and white.

For many, living in Iowa isn't really a choice. Same for many places that are
not major cities.

~~~
rayiner
I won’t claim to know what it’s like to be gay in Iowa, but as a non-white
person myself I’d love to live in Iowa. Des Moines has roughly the same
percentage of Hispanics and non-whites as Portland or Seattle. The income gap
between Hispanic and non-Hispanic households is also narrower in Iowa than the
national average.

~~~
JoeAltmaier
Iowa City, home of the University of Iowa, has a large, active, prosperous gay
population. Activism is outspoken. Churches have gay ministers. The Gay Pride
parade every year is boisterous and hugely attended.

Not that there isn't gay-bashing, like so many places. But I'd guess there's
'safety in numbers' going on?

Anyway even back in the day, I had several gay classmates (but back then they
weren't outspoken about it). These days, my son's classes had coming-out
parties etc for classmates.

My daughter-in-law's parents are gay and outspoken about it. My cousin's
daughter is married to a wonderful lady, and they've adopted 4 kids who are
amazing additions to the clan. We have lunch once a month and catch up.

So some parts of Iowa, at any rate, are not wastelands of backwardness.

------
rayiner
There's a really significant caveat on page 5, regarding the factors used to
adjust for purchasing power:

> Using the PPPs from the OECD instead, between 25 and 32 per cent of Canadian
> households would be better off than their American counterparts. The
> Appendix provides the full estimates using PPPs from the OECD.

Leaving that aside, Canada is broadly comparable to the US in terms of policy
so we would expect it to have similar outcomes. Over the past few decades,
Canada has been pushing a massive policy of economic liberalization:
[https://www.cato.org/publications/commentary/great-right-
nor...](https://www.cato.org/publications/commentary/great-right-north). Their
government spending as a percentage of GDP dropped from almost 50% in 1990 to
under 40% (comparable to the US) in 2008. They've done a better job
controlling the deficit than we have, so they have lower debt as a percentage
of GDP. They've cut individual taxes to around U.S. levels, and have cut
corporate taxes to below U.S. levels. Canada's social spending as a percentage
of GDP is slightly less than the US's as of 2014:
[https://ftalphaville.ft.com/2014/11/27/2053392/welfare-
spend...](https://ftalphaville.ft.com/2014/11/27/2053392/welfare-spending-
across-the-oecd). Canada has also aggressively deregulated: Canada ranks #8 in
the Heritage Foundation's economic freedom index, versus #12 for the US.

Canada, Australia, and the United States are more similar than they are
different, both culturally and economically. Unsurprisingly, outcomes in those
countries are also very similar.

------
sysbin
Canada is tremendously better than the USA if you're young (18 to 30 years
old).

I had the shittiest life in the USA, was born in Canada but parents moved to
USA and when I was seven years old; parents were lower-middle class for
context.

I've only managed to move back to Canada a few years ago and I wish I never
would go to the USA ever again if I could live life over. Canada has free
healthcare and I'm a transgender person; so that's awesome that people are
taken care of medically. In USA I was denied healthcare by doctors based on
their religious beliefs. I even suffered conversion therapy and multiple
incidents of discrimination that would have easily ended with legal
proceedings in my favour if it had occurred in Canada instead of the USA. The
legal help for minorities in USA is a joke and they turn away people unless
they feel like media will love the story.

Other benefits would be university cost in Canada is affordable compared to
USA. In Canada tuition loans will not start collecting interest until after
you have a degree and working (I believe). Also you can declare bankruptcy if
you need to unlike in USA. Food here is way healthier than the USA. Social
workers here care in helping people find jobs, get the resources they need and
there is legal aid if you're jobless.

~~~
lostgame
I...I can't believe people are downvoting stuff like this.

We're virtually in the same position - I am also transgender, and would have
to pay hundreds of dollars for HRT if I was down there, alone.

There are unfortunately a lot more biased, seemingly pious individuals here,
who are just downvoting these kinds of comments without even providing proper
criticism.

That's what 'patriotism' gives you. Amurrrica!

I've even had folks directly misquote me and put words in my mouth to argue
with me. I've never even seen that on HN.

~~~
WkndTriathlete
I can only speculate why people are downvoting, but I suspect it's because
sysbin's comment seems to suggest a particular state of mind:

\- Ignorance of the First Amendment \- Extreme sense of entitlement and
expectation that others should do as he/she expects regardless of how the
other person feels about it

Phrasing it as "I was surprised to find that doctors in the US can refuse
treatment to transgenders based on their religious beliefs" would probably
have led to far fewer downvotes.

~~~
sysbin
Hypocrisy is what you're preaching right here. People downvoting me for
expressing (what "they" consider a first amendment right) by voicing my
opinion that Canada has it better for not restricting healthcare based on
religious ideology. That's hypocrisy against my USA and Canadian right.

People are scum when they use religion as an excuse to allow someone's health
to be worse than if religion didn't exist to result in the maltreatment
compared to a person with an illness they find tolerable by their beliefs for
following treatment protocol accepted in the medical community.

I can voice that opinion in Canada or in the USA. Canada has it better for
trans people. I'm sure "scum" in USA will not care about that because they're
a bunch of narcissists.

------
RickJWagner
This one was on Hacker News a few days ago.

"The Poorest 20% of Americans Are Richer on Average Than Most European
Nations"

So I guess Canada > US > Europe?

[https://fee.org/articles/the-poorest-20-of-americans-are-
ric...](https://fee.org/articles/the-poorest-20-of-americans-are-richer-than-
most-nations-of-europe)

------
codewritinfool
A Canadian friend of mine lives in B.C. and told me that, "80% of Canadians
live within x miles of the U.S. border.... We call it 'huddled up to the
stove'".

~~~
err4nt
it's within 200 miles. Also a different but fun fact - 80% of the canadian
population lives in one straight line between Quebec City and Windsor Ontario
(adjacent to Detroit), we call that l'axe Quebec-Windsor:
[https://en.wikipedia.org/wiki/Quebec_City–Windsor_Corridor](https://en.wikipedia.org/wiki/Quebec_City–Windsor_Corridor)

~~~
winter_blue
> 80% of the canadian population

The Wikipedia article you linked to says it's actually closer to 50%.

Quote: _" With more than 18 million people, it contains about half of the
country's population"_

------
product50
And then you realize that the population of Canada is 10% of US. Canada should
be compared to the Nordic countries vs. US in terms of quality of life etc.

~~~
grecy
I have never understood why people assume that just because the US is bigger
than other OECD countries that it can't have the same levels of happiness, or
the same quality/cost of healthcare and education etc.

Why do you think the US should aim lower simply because it has more people?

Why don't you think per-capita comparisons are valid?

If anything, the US should be better than smaller OECD countries because it
gets a huge benefit from scale.

It feels like you're simply giving up "because we're bigger" on even trying to
just equal other OECD countries.

~~~
mikeash
Taking it further, does this mean we should break the country into a bunch of
small ones so we can all be better off?

~~~
rayiner
We wouldn't all be better off. We would just end up comparing Maryland or
Massachusetts to Switzerland and Sweden.

------
ghobs91
and yet when clicking the link, the headline says "Canada’s household debt
levels higher than any other country, report says"

~~~
acchow
I'm seeing a different page from yours.

Headline for me is: "Most Canadians Are Now Better Off Than Most Americans"

With a subheadline: "Middle-class people in the U.S. are losing ground to
their peers in other rich countries."

------
topkai22
I wonder how much this has to do to with immigration and immigration policy.
The US and Canada have both been very open to migrants since the at least the
80s (current US administration exempted), but Canada has aggressively pursued
attracting high skill foreign born workers while the US has not. I know US
foreign born average earnings are substantially below native born earnings,
but I couldn't quickly find similar statistics for Canada

------
imedadel
Archived link:
[https://archive.fo/20190829140749/https://www.bloomberg.com/...](https://archive.fo/20190829140749/https://www.bloomberg.com/opinion/articles/2019-08-29/america-
s-middle-class-is-losing-ground-to-canada-s)

You can use this chrome extension to easily get the archived page:
[https://github.com/ImedAdel/arkiv/releases](https://github.com/ImedAdel/arkiv/releases)

------
perl4ever
The headline is a very ambiguous statement. It seems to be consistent with the
proposition that the top 51% of Canadians are better off than the bottom 51%
of Americans, which would be an exceedingly small difference.

On the other hand, if the top 80% of Canadians were better off than the bottom
80% of Americans, that's a huge difference, but kind of implausible.

------
tmaly
Cars in the US are far cheaper than in Canada. One of my coworkers in the
Montreal office came to US to get a used car. Even my German friend who is
working here on a contract, could not believe how inexpensive a BMW was here.

------
true_tuna
Also every American who dies of cancer or other major medical condition will
have his or her lifetime savings wiped out by medical bills. So measure
average net income minus expenses at time of death and I’d be surprised if we
beat Bangladesh. They probably have a higher gross national happiness in life
as well.

------
true_tuna
Eh?

------
amadeuspagel
Doesn't account for immigration. The US has lots of poor immigrants, which
drives the median down.

~~~
Mikeb85
Canada's immigration rate (of legal immigrants) is higher than the US'. We
take in nearly twice as many immigrants as the US, relative to our population.

~~~
drak0n1c
Canada is known for being very accepting of middle class and educated or
skilled immigrants. Poor immigrants (which is what the original comment was
specifying) not so much, and Canada's border enforcement is more effective
than that of the US.

~~~
Mikeb85
Sounds like a failure of the US immigration system if new immigrants are
unable to get decent jobs, even while the US accepts half as many immigrants
per capita. Also interesting is the current political discourse in the US,
where prominent voices in the media want to take in more currently rejected
and undocumented migrants while the US is losing ground to other developed
countries for income deciles 1-6.

